Banks and their branches have always innovated: the ATM, which turned 50 in June, didn’t appear out of nowhere. In fact it was the brainchild of British bank customer (and techie) John Shepherd-Barron, who got the idea after he experienced the utter frustration of showing up one minute after his branch closed—a minute, as it turned out, that changed banking for good.
And yet on many other fronts, branches of just a generation ago didn’t exactly get too creative (beyond giving out toasters) to attract and retain customers. People always had to visit a branch to manage money. Where else would they go?
Of course, today’s answer to that question is as evident as the smartphone in your pocket—which, as customer convenience goes, is truly the greatest thing since sliced bread, toasted or otherwise.
But as for how to butter it, banks have had to reconsider everything in terms of how branches cater to customers, says Ray Wizbowski, chief marketing officer at Entrust Datacard, a company based in Shakopee, Minnesota that provides financial institutions and other businesses with identity and security solutions.
“It used to be you had a bank that was your trusted financial partner in buying a home or a car,” Wizbowski says. “Now whether it’s from online banks such as Ally or lending services like SoFi, you have financial products that come from somewhere other than your conventional bank. And in most cases, these alternatives have the same level of insurance and integrity that financial institutions have.”
Thus banks, Wizbowski says, are doing everything they can to change their image of that stoic, staid building where someone hauls their money out of a vault. And branches aren’t just changing: they’re breaking out with revamped layouts, mashed-up functions (iced mocha and a scone, anyone?) and snazzy high-tech. That’s why some recent developments that may seem out there could soon be seen right here, there and everywhere.
Here we spotlight five revolutions that offer a glimpse into what many (or even most) branches could resemble someday.
Bank lounges. Haven’t noticed these yet? Virgin Money has been very committed to this concept, with seven U.K. branches already in operation. The thinking is that many people bank on the internet at home, often in sweatpants and sipping coffee, so let’s replicate that experience as much as possible. People are encouraged to come to the Virgin Money Lounge … and lounge.
"They’re designed to be places where our customers can relax and local communities come together,” says Scott Mowbray, director of external communications for Virgin Money.
Replete with plush couches, throw pillows and big-screen TVs, the lounges offer free coffee, tea and other hot and cold drinks (but ask that customers not take them outside, a policy that apparently prevents the lounge from becoming everyone’s personal refrigerator). There are also iPads and iMacs for customers to bank on. (Customers can’t take those mobile devices outside either, as that’s bank theft of a different sort.)
Banks that resemble stores. Wizbowski raves about FRANK by OCBC, a “store” run by OCBC Bank (OCBC stands for Oversea-Chinese Banking Corporation and is headquartered in Singapore). There are five Frank by OCBC locations in Singapore and can be found in retail settings, like shopping malls.
These are full-fledged branches, but you’d never know it at first glance.
“You can go in, and they have a wall of designs of debit and credit cards,” Wizbowski says. “Talk about hyper-personalization. You can choose whatever design you like—there must be at least a hundred different choices—and then they’ll produce that card for you right there for free or a nominal fee.”
Spoiler alert: FRANK is aimed at millennials. “You have to invest in the bank branch to make it relative to that audience,” Wizbowski says. Should FRANK or some similar concept come to the U.S., banks that covet this demographic will no doubt keep a close watch to see how or whether it succeeds.
Banks that double as community centers. Portland, Oregon-headquartered Umpqua Bank has branches that offer free coffee and snacks, WiFi and device charging stations, and even free use of meeting rooms. That might sound familiar or at least easy to imagine. But making a deposit and performing a downward dog in the same location? That’s unique. Umpqua also hosted yoga classes, as well as wine tastings and knitting sessions. Which makes sense: Whether you have a lot of it or a little, money feels very personal, a truth banks such as Umpqua are beginning to grasp in novel ways.
“The bank branch of tomorrow focuses on customer relationship building and advisory services, rather than transactional tasks,” says David Horton, managing director at Synechron, a New York City-based information technology and consulting company that works with the financial sector.
Bank coffeehouses. Forget the Styrofoam cups and pile of stirrers by the teller line. These bank cafés sell high-end coffee and other treats. For instance, the Capital One Café offers bank coffeehouses in several cities—Boston, Chicago and Los Angeles—and if you have a Capital One account, you'll get a discount on the coffee. Yet the concept has not been without growing pains; Capital One recently closed a location in Chicago’s tony Gold Coast after it was apparent that far more people visited to borrow the free WiFi than take out a loan.
Yet the java house idea remains popular and is pivoting. Bank-coffeehouses hybrids are popping up worldwide in places like the Nakheel mall in Riyadh, Saudi Arabia. Alawwal Bank partnered with the company Costa Coffee to open the Ibda Café in April. The open-air digital concept purports to be the first of its kind in the world.
Each tabletop is fitted with a touch-screen tablet that allows visitors to explore the Alawwal Bank's digital portal. Customers can engage in range of services, and the portal even offers children educational games, according to Horton. Synechron (which has operations in the United Arab Emirates) worked with Alawwal Bank to create the café.
“Alawwal Bank’s main priority was to make the branch a destination of choice, and more importantly wanted customers to be able to act on impulse and open an account, apply for a credit card or take out a loan with minimal friction and instant issuance,” Horton says.
Robot tellers. Ever since 2015, two branches of the Mitsubishi UFJ Financial Group have had Nao (Japanese for the word, “Now”), a robot teller that answers customer questions. The 58-inch tall creation with endearing button eyes looks like something straight out of a Star Wars outtake. More recently, at City Union Bank, in Chennai, India, customers can ask simple questions of a robot that will eventually be engineered to do some banking transactions.
If you’re wondering when the United States will see its robot tellers, expect to wait. Some nations are faster to adopt the gee-whiz technology because customers have been slower to embrace certain banking tenants the way Americans have, Wizbowski says.
“For instance, Americans, on average, have six credit cards and it used to be seven. In Germany, they have two, and one of them is there because the bank gave it to them. Banks in other countries often have to work harder to motivate customers to be more engaged. In America, we’re already there.”
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Veteran journalist Geoff Williams is the author of two books, "C.C. Pyle's Amazing Foot Race" and "Washed Away."