Recently a friend and colleague published an article, Keep, Close or Transform? 3 Steps to Rationalizing Your Branch Network, on The Financial Brand website.
In the article, author Joe Sullivan of Market Insights, offers a basic methodology and a Delivery Stratification Scenarios table which banks and credit unions can use to evaluate their branches with the goal of, you guessed it, keeping, closing or “transforming.”
But what does it mean to transform a branch? And are community banks and credit unions really making a true transformation, or just redesigning?
Beyond the removal of the teller line in favor of pods, and the addition of technology bars and personal teller machines, we’ve noticed a trend towards lounge or cafe areas. It is within these spaces that we find the real test of whether an institution is transforming or redesigning.
With free wifi and coffee, comfy couches, charging stations and/or tables and chairs, the idea seems to be to make the financial institution a destination, similar to Starbucks or your local coffee shop. But each time I visit a space like this, I find myself wondering. . . do the bankers really want people “hanging out” in the branch for hours on end? What would the branch team think if a group of people camped out on the couches with friends, or solo?
And, frankly, have we ever asked customers or members if they want to hang out at the bank or credit union? (Given how few people are in these spaces when I visit, I’m guessing the answer to is no).
Institutions who actually want people to make their branch a destination for customer and community need to think about where people hang out now. Instead of creating a poor imitation of a coffee shop, follow CapitalOne’s lead and open a café that happens to be a bank. Instead of investing in redesigning huge branches, split up the space and, like the Ferguson Library in Stamford Connecticut did, partner with a local coffee shop or Starbucks franchisee to create a shared space that fills a need and capitalizes on each organization’s strengths.
Or, perhaps we can ditch the whole lounge/cafe idea altogether and embrace “tiny” branches, like the “studio” branches opened by BMO Financial Group.
While the trend towards making branches more efficient and welcoming to customers is a good one, but let’s be realistic about what the customer or member wants (and where they want to hang out).