Starting my career in the Financial Industry as Director of Corporate Architecture at Fifth Third Bank and subsequently as President of K4 Architecture + Design, I’ve been very fortunate to be in the business of designing and building banks for over 25 years. Although the banking industry has undergone immense changes during that time period, the five lessons below I’ve found to hold true; even as the integration of technology, ever changing regulations, and the size and scope of branch locations and services rapidly evolve and lead the branch transformation movement.
1. LOCATION: PHYSICAL MEETS DIGITAL
As the number of U.S. households that utilize electronic banking services increases, one might assume consumers to place less value on a bank’s physical location. According to The Financial Brand’s 43 Retail Banking Myth’s, “not all customers want to do everything remotely and people still want local advisory services.” Also, while the myth of branch decline has received widespread attention, “there is a still place for a brick and mortar experience albeit with fewer bricks and less mortar. We need to rethink the branch model and experience, but bankers will be offering a strong physical (and digital) presence for decades to come.”
When selecting a physical location, standard site selection practices of evaluating the demographic characteristics of your defined market area, population, number of households and income trends are still very useful as well as age, employment, traffic and proximity to retail sectors. Also, knowing your competition in the marketplace, especially those in close radius – who they are, what services they provide and do not provide, and what is it that they do differently.
In the digital age in which we are living, you must be able to provide your customer products and services where they are, and on their terms. Gen Y is a mobile population, so whether they are away at school or moving to a new city for their first job – they don’t want to pay fees to access their money. Pump up online and mobile banking options if you can’t have a branch or ATM location everywhere they are.
2. THERE IS NO “ONE SIZE FITS ALL” WHEN DESIGNING YOUR BRANCH
I get asked this question by Bankers frequently, “In what direction should we be going with our bank design?” There is no one correct answer or formula for determining a branch design that works for your company, employees and customers alike.
Some questions to consider:
- Does your current space fit your needs?
- What services do you intend to provide?
- Will you be implementing new technologies?
- Will you implement personal touch vs. automation?
- Will you keep the traditional teller counter or move to a POD concept?
I’ve personally seen a big transformation in branches changing from less of a transaction based facility to a place for a physical point of interaction; therefore the concept of the Universal Banker begins to emerge as a consideration for designing and staffing your facilities, and planning for the flow of activity occurring within it.
3. THE ROI OF BRANDING IN THE BANKING INDUSTRY
Are you ready and willing to make an investment in your image, and do you believe in the ROI power of a consistent and relevant branding strategy?
A strong and consistent brand conveys more than success to your customers and employees. The less differentiated a brand is, the more forced it is to compete on price. Having a recognizable and attractive facility or a fresh or updated space with your brand conveyed throughout is creating an experience, which should have priority over products and services.
Consistency of your brand should be evident throughout every aspect of your institution as the financial brand can encompass many components in both the physical and digital space. Examples would include: the physical structure, the branch design and interior environment, products and services, front line service, the website, social media, marketing materials, signage, credit cards, branded technology, community sponsorships, advertising, etc. Being brand consistent means being consistent in everything you say and do, with everything the customer can see, hear, or touch.
Do not skimp on your brand or underestimate its value. Brands outlive the ever changing product life cycle and convey a uniform quality, credibility and experience. In the face of economic down times, strong brands are more equipped to survive.
When mapping out your brand strategy, I suggest that branch prototypes be developed around a few key items that will become the basis for your brand in your various locations and marketing assets:
- Brand consistency and simplicity of translation and application.
- Flexibility to change, and ease of change implementation.
- A strong balance between the bank brand and local community values and history.
- A strong differentiation from competition, because they may be just across the street or next door.
4. BE THE LEADER – NOT THE FOLLOWER
Amongst the Branch Transformation Top 10 Retail Banking Trends and Predictions for 2014, some that stand out to me are a drive-to-digital, increased competition, focus on the digital consumer, and simplification of engagement.
Comparable to the media industry in the digital age, those who are too slow to adapt or embrace new technology will feel the repercussions sooner rather than later.
The goal of financial marketing, in both the physical and digital space, is to bring in good traffic and interpret which trends can be made into reality. While you may think some of the new banking trends could work only in urban markets with the more technologically savvy youth, modernizing and introducing new technology to your branch to satisfy both older and younger generations is possible. In some smaller communities we have found that bank branches do like the idea and approach of designing their facilities to be a destination, or a place for social interaction. They want to be part of the community by attracting all age groups, solidify their place in it, and gain market share against banks with a national footprint that may not have the same local angle working for them.
5. HIRE THE EXPERTS – BRING IN THE TEAM THAT KNOWS AND UNDERSTAND YOUR INDUSTRY
Bank Design is a professional service, not a magic formula. An effective client-partner relationship arrives at design solutions that aren’t just creative; but also useful and efficient, driving your profitability and success, and ultimately a greater ROI for your organization. A good design firm should take the time to understand your business, your customers, your community, and help you frame the problem(s), identify opportunities, and plan for growth.
Often, Community Banks have a tendency to hire the local Architect that may lack knowledge and experience in the financial industry. There are many factors to consider when designing a financial facility, so hire a firm that knows and understands how they operate and function. For instance: Combine factors such as spatial relationships between the offices and the transaction areas to allow cross selling opportunities. Integrate appropriate technology and equipment for efficiency, promotion, and brand consistency. Both of the above must be considered and work simultaneously to create the ultimate customer experience.
Make the branch a great first impression and lasting impression, set yourself apart from the competition, show your commitment to the community and take pride in your history, and know your customer’s needs and expectations; they will take note of the difference your organization provides and you can capitalize on one of your most valued marketing assets, your branches!