The Future of Branch Banking

Building Loyal Environments

! Large regional and super regional

banks hardly go unnoticed these days with a presence in most metropolitan districts.

Some even prefer to take on a futuristic look reminiscent of a Times Square billboard.

Take for example walk up digital displays which let you do everything from banking to

movie t icket orders. With marketing superlatives like these, it’s no wonder

community banks and credit unions are challenged with advertising their services all

while on much leaner budgets.

! Online banking has made room for fewer teller lines and less foot traffic, so while

customers are making less trips to the physical branch, they still rely on its presence

for important transactions requiring a personal touch. Its this personalization which

is driveing the future of bank branches.

Web based strategies provide stickiness, but maximizing the in person transaction remains

necessary to keep a customer for life. Armed with smaller budgets, its just a matter of

rolling up the shirt sleeves, and being creative when it comes to promoting

customer offerings.

So just what does the bank of the future

look like for regional banks? Thankfully nothing like something you might see in a

larger metropolis, but rather a central location with neighborhood appeal with retail

strategies for cross selling opportunities.

Banks are in the business of growing profits after all.

“Armed with smaller budgets, its just a matter of rolling up the

shirt sleeves, and being creative when it comes to

promoting the branch offerings.”

By the Numbers!

! Experts predict some banks will see closures of branches in the upcoming years,

while some emphasize a greater number of locations for increased foot traffic. Then there

are those analysts right in the middle, supporting a position in which the branch is

here to stay, but undoubtably needs to undergo a transformation. If you are

considering which route to take, we invite you to explore today’s opportuni t ies for

engagement which don’t require flashing lights and over the top electronics, but do

encompass a retail opportunity which supports engagement.

F r o m p r o m o t i o n a l

items to way finding, spatial design, and

signage, we present the future of bank branches which go the distance when it

comes to lowering attrition and rebounding from the 2007 decline.

Just the Facts! Consider the statistics. It still stands

that people older than age 55 prefer to bank in person, while the younger generation

enjoys having options. With so many offerings including loans, mortgages, and

investments requiring a personal touch,

branches can reach out to customers using

retail ambitions without overwhelming costs.

According to Celent, a Boston based research and consulting firm, “Branches

aren’t dead, they’re just different,” and thus need to undergo a change. So where to

start?!

#1 Building Loyalty! Banks are currently set up for high volume transactions at the teller line. For

years they have been working to cut back on in branch traffic, however as we know,

directing this traffic is still very i m p o r t a n t t o c u s t o m e r

retention. Building loyalty can

start with small

promotional items such as quality t-

shirts, giveaways, a n d

e n v i r o n m e n t a l signage including

history walls, and well positioned

coffee kiosks.

“Branches aren’t dead, they’re just different,”

#2 Maximize Investments

! Lean budgets can be stretched by

refreshing existing furnishings. For example one banking customer is dealing with an

excess of teller windows due to the lower volume of in-store transactions we are all

witnessing. The cost of removing this space altogether is prohibitive, and would also need

a design update. Rather than leaving the teller windows as is and risk the “going out of

business look,” We are helping this client maximize their current investment with

environmental graphics promoting their mobile banking application.

The investment was practical especially since

the message would be stretched across multiple locations.

#3 We Like Small Banks! Next up are dimensions. Small banks

can be fully functional with minimal square footage. Take for example UMASS Five

Credit Union’s 990 square feet of what was once a sushi bar. Accustom to just a walk up

window, students and staff are now banking at teller pods, with room to learn about

specialized products and services. The environment has a youthful appeal with

consideration to professors and other members by incorporating brand appropriate

colors, environmental graphics, POS, and

furniture.

#4 How May I Help You?! Some banks are trending with virtual way finding rather than relying on subtle

layouts. Concierge acts as a welcoming committee, guiding customers to various

destinations. Lounges are making headway too giving business customers a chance to

interact in video discussions with bank members who may be off site or use the area

as a meeting spot for important transactions.

#5 Create Work Centers Kiosks are also gaining traction in which customers can do everything from banking to

virtual life management similar to ticket dispensers at the airport, or self check-out a

the grocery store, where all one needs is a real live person when they run into a hiccup.

Rendering of teller line options

The benefit to the branch is fewer staff

members and less overhead.

#6 A Family Affair Banking customers are real people with family, and playing on the lollipop bowl

visitors are also starting to see kid’s areas for the much needed distraction when doing

those essentials such as considering a home loan. On the topic of lounges, and office

space, banks can also provide financial seminars, and teaching opportunities.

# 7 Small Touches! The number of banks undergoing redesign has increased over 2010, from 58 to

66 percent in 2012, and 55 percent will make major changes to branch designs enterprise

wide.1 What are all of these banks working on? The situation varies, but some are doing

total redesigns, and others are making

changes such as lighting, color, and using moveable furniture and office space.

The branch of the future is bright, literally.

Some locations are bringing in updated lighting which is more energy efficient and

even creates the feeling of being outdoors. !

#8 Green Energy InitiativesThere are also banks taking on green energy initiatives in which there are no printed

materials of any kind, rather signs indicating where to find information onl ine, or

e n c o u r a g i n g t h o s e m u c h n e e d e d conversations with loan officers and brokers.

Another big trend is scaleable structure. For

some branches there is a cost saving to have demountable walls for offices in the event

they change locations. The investment in furniture isn’t completely lost in these cases.

#9 Service Promotion

! Taking a cue from retailers, banks are doing things with layout including changeable

stands which can shift with marketing campaigns. Looking to promote small

business accounts next month? That’s easy with a shelving unit, or table settings with

branded coffee mugs, brochures, and giveaways. The benefit is the ability to modify

1 http://thefinancialbrand.com/25524/celent-branch-banking-in-a-multichannel-world

UMASS entry wall and waiting area

the scene preventing customer boredom

while showcasing your services.

! NSB kiosks are a great way to advertise as

well. Want to display holiday banking hours while encouraging brand appeal? Use a cling

w h i c h c a n b e e a s i l y recognized from the front

entrance. Wall displays can include a pictorial of the

bank’s history warming up the environment while also

t e l l i n g a s t o r y a n d encouraging a community

feel of trust. Want to be a bit edgier? Invest in digital

s ignage which can be differentiated as needed.

Handouts, brochures, and giveaways can all be used to

cross-promote as well.

# 10 Optimize the Drive Thru

Don’t stop at the door. Utilize the drive thru for

those customers who only do their banking on the go . We have a c l i en t who

implemented a campaign for mobile banking, and reached their audience with QR codes

for downloading the application where it

couldn’t be missed, at the ATM and drive up

window.

There still remain so many reasons for

customers to put their mobile device away and bank the old fashion way, face to face.

Yet, with so many choices these days,

and advertisements coming at us faster

then we can blink, it is necessary for

banks to change up their appeal and go

the way of retail stores who know

h o w t o s e l l a product.

Learn from the Big Retailers

S o m e g r e a t e x a m p l e s t o

consider are major name brands such

as Levi’s, which has changed it’s department

look at JC Penny’s to foster its brand with a rustic ranch vibe. This is what customers who

wear the jeans want to experience when they buy the product. Other brands are doing the

same thing in department stores, just take a look around and see where your mind is

Prototype small business kiosk

drawn, and consider how the display makes

you feel better about a purchase, and carry that feeling all the way to the bank.

Levi’s new in-store retail area