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Repurposing the branch


An abandoned machine shop becomes a brew pub. An old train station gets a second life as an Internet café. Shipping containers are converted into cozy tiny houses and stacked to create eye-catching office buildings.

Call it creative repurposing. Call it adaptive reuse. Call it recognizing consumers’ changing preferences and responding with engaging solutions. In the same way, financial institutions may need to weigh their options for transforming older, inefficient branches into profit centers that entice customers to stop in.

The oldest branches in a bank’s network were likely built in an era when operations required ample space to accommodate a large teller staff, several private offices and rows of file cabinets and other document storage. With the steady decline in branch traffic over the last quarter-century and increasing reliance on automated transaction processing and electronic record keeping, branches can now operate cost-effectively in a fraction of the space required previously. However, closing older, fully depreciated branches may not be an option given the tremendous cost to replace them with smaller, more efficient offices.

As an alternative, executives might consider how best to creatively repurpose these branches into more vibrant destinations that facilitate higher quality interactions with customers looking for guidance in managing their personal finances. We need to reimagine older branches as inviting, sales-centric showcases for the financial products, services, and support consumers expect from a trusted advisor. The first step in that direction is to understand the business case driving the transformation.

Ask the right questions. Why are you considering a sizable investment to repurpose existing space and create a new sales and service paradigm? Concrete answers to that question will go a long way toward guiding functionality and design decisions. Beyond the why is who and what. Which customers use the branch now and for what services, and how can you continue to serve them while reaching out to a new customer base with expanded and enhanced services? How have the demographics of the service region and the expectations of customers shifted since the branch first opened?

Wipe the slate clean. Instead of working with the existing branch layout, imagine what you could do with all that space starting from scratch. Replace the imposing teller counter with comfortable pods and a self-service center off to one side for routine transactions. What about the rest of the currently underutilized space? A variety of possibilities may emerge based on location, the needs and preferences of your customer base, and the inspiration you may find from other financial institutions and service sectors: 

  • Emphasize convenience. What if customers could check off several tasks on their errands list when they stop by your office? Perhaps they could buy stamps, ship a package (or pick up one), pick up a gift card, purchase or recharge a transit pass, and even pause to enjoy a cup of coffee as they check their balances at the technology bar and chat with a helpful agent.
  • Connect to community. A Main Street or centrally located branch could open its doors and conference areas for community meetings and events and financial education partnerships.
  • Become a one-stop financial center. Make excess office space available to business partners like insurance providers, wealth management advisors and trust services. By offering ready access to a full range of financial services, your organization can position itself alongside other providers as the trusted advisor customers rely on to achieve their financial goals. By helping busy consumers respond to the challenge of staying on top of personal financial management, you can establish deeper relationships that give customers good reasons to look on your transformed branch as their financial center, in every sense of that term. When your investment in brick and mortar complements the convenience of remote services, the result is an omnichannel experience firing on all cylinders.

Enhance the customer experience with technology. Speaking of the omnichannel experience, it may be useful to examine how your organization parlays technology to strengthen its brand identity across channels. Do your online and mobile services provide the range of product information, account access and interactivity that existing and prospective account holders expect when conducting routine transactions and shopping for new services? Are you leveraging branch technology such as self-service kiosks, smart ATMs and cash recyclers to free your staff to handle higher quality exchanges with customers? Are you deploying the most effective combination of user-friendly technology and sophisticated, automated tools to optimize staff scheduling aligned with evolving traffic demands and reporting to track and increase sales across the branch network?

Train staff to thrive in this new service paradigm. Branch employees will be spending less time conducting routine transactions and more time guiding customers in making decisions central to achieving their financial goals – and, in tandem with this new focus, more time selling the products and services customers need to achieve their goals. In addition to honing their transactional skills and product know-how, staff training and development must also encompass building sales skills.

Data from our 2015 Teller Line Study supports the case for transforming branch service, reporting a 45.3% decline in transaction volume – and a 90.1% increase in staffing costs – since 1992. Smarter scheduling can reduce labor costs and boosts productivity. Comparing productivity measures from the teller line study, branch staff at community banks processed 13.1 transactions per hour on average in 2015, compared to 16 transactions by credit union staff. Branch employees at FMSI’s top 10 client institutions utilizing sophisticated scheduling software averaged 21.2 transactions per hour.

Effective execution of a creative, new vision for the branch can renew its purpose as the flagship of your organization and deliver the financial services consumers want and need with optimal efficiency, convenience, and currency. In other words, as Anthony Burnett, chief evangelist at Level5, has said, “Knowing what we want to have happen in the branch will drive decisions about technology, branding, service delivery, and human investment in the new space. The customer experience for many financial institutions is centered on maximizing high-value interactions with customers who enter the branch. We want to capitalize on these opportunities to drive deeper into relationships, build trust, increase wallet share, and provide a level of service that goes beyond traditional order-taking via a teller line.”

Like other examples of creative repurposing, the branch can become something novel and inviting, and definitely worth the trip for a firsthand view of what person-to-person banking in the twenty-first century looks like.

Ms. Deen is president of Alpharetta, Ga.-based Financial Management Solutions, Inc. (FMSI), which provides financial institutions with business intelligence and performance management systems for efficient branch staff scheduling and lobby management. She can be reached at [email protected].