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Making the branch relevant by design

Banks need to innovatively rethink their physical environment and test new ways of connecting with customers.

Jul 20, 2022 / Consumer Banking
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Among the foremost priorities for banks and credit unions is improving the customer experience by making transactions faster and easier. Branches are seen as having a key role in developing deeper and more profitable connections.

BAI recently spoke to Jean-Pierre Lacroix, co-founder and president of the Toronto-based branding and design firm SLD, about the current state of the branch, and how banks and credit unions should be thinking about their physical presence in a digital-dominant world.

The interview has been edited for length and clarity.

BAI: What role does design play for traditional financial institutions, and how has that role been changing for banks and credit unions as digital technology redefines the industry?

Jean-Pierre Lacroix: We need to realize that customers, irrespective of age, put a lot of value in the built environment to have conversations with their bankers. The pandemic has shifted the relevancy of the branch from transactional toward more consultive selling, so the question becomes, “How do you transform that branch into an advice center and then use the branch to reduce customers’ financial anxiety and help them manage their finances for their future?”

Your company, SLD, talks about “owning the blink factor,” which you call a critical branding element for financial services providers. What is the blink factor, why is it critical and how does a bank get to own it?

The “blink factor” concept was inspired 32 years ago when we were doing work for Pizza Hut in the U.S. At the time, many consumers were calling Pizza Hut “Red Roof,” and when we dug deeper into why they were doing that, we realized that customers make decisions visually and emotionally. The blink factor is that split-second experience of connecting emotionally with the consumer as they are interacting with the bank. The more emotionally connected customers are with their bank, the greater their loyalty, the more they are willing to pay for services, and the longer they stay with that financial institution.

How does a bank’s physical presence contribute to its desire to connect emotionally with customers at an individual level?

We’ve surveyed U.S. banking executives to determine the state of physical and digital transformation for banks. In doing that, we identified two major dimensions that executives are concerned about. The first is technology for technology’s sake that is not effectively connected to the needs of people, and the second is that there’s a significant skills and capabilities gap within banking. I think the future holds more connection among digital technology, physical environment, staff training and engagement as banks build more personalized relationships with customers.

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Name some banks or credit unions in North America that you think are using design and branding well, and what are they doing to make you think that?

Regions Bank and U.S. Bank are doing a phenomenal job of shifting the customer journey from transaction to advice, and Bank of America and Royal Bank of Canada also stand out in looking at customer needs when it comes to the built environment and embracing design as an important factor. To me, it comes down to a bank’s willingness to innovate. Are they testing different technologies to engage customers? Are they testing different branch layouts? Are they testing different transaction zones and engagement zones? Most banks today are looking seriously at customer experience in their built environments.

What have you seen lately that looks like it may be at that forward edge of technology, design and branding within financial services?

If you really want to look at the future of banking, take a plane ride to China and spend two weeks there visiting branches and bankers. I can go to a branch in China and open an account, get a credit card and get a debit card without ever coming in contact with a banker. You don’t queue in China; you check in. They’re also ahead in using augmented and virtual reality. About five years ago, at Huishang Bank, we used virtual reality as a way to help educate customers about financial products and services. I think that we’re going to see more and more of these customer-centric changes and new technologies in North American branches as banks focus more on providing advice.

Terry Badger, CFA, is the managing editor at BAI.

Learn how bank branches are evolving for the future in this BAI Executive Report, “Branch banking continues its radical evolution.”