By Chris Nichols
Since at least the early 1500’s, bank branches have been the central interaction point between a bank and its customers. Next to a bank’s staff, branches are one of the largest contributors to a bank’s overall brand and thus rank highly on important items for customer satisfaction. Even more important, the look and layout of a branch has a profound effect on employee morale. With bank technology changing the process of banking, we wanted to better understand the crossroads between the physical and the virtual and how the successful bank in the future will leverage both. Today, we present seven takeaways plus some additional insight that should be taken into consideration when planning your next branch design or when it is time to conduct a remodel.
Future Changes – Flow, Energy and Interactivity
To help us answer some of these questions, we toured 40+ branches last week, interviewed branch customers and enlisted the help of an experienced branch designer/developer.
While there is a healthy debate over the role of the branch in the future, almost all experts agree the footprint will be smaller—by some estimates, about 75% smaller. Branches used to optimize around 12,000 square feet and are now optimizing around 4,000.
More importantly, the ideal branch is evolving to be less of a rectangle (the most common branch layout today) and more of a square. Keeping traffic flowing, creating more interactivity and keeping energy high in a branch are central tenets of design. And with less reliance on the traditional teller line, and more emphasis on delivering financial support, a square balances all the elements to provide the highest overall satisfaction, while optimizing usable space.
Technology is now central to every branch, and more banks will be devoting square footage that will emphasize training and usage of a bank’s technology. This is a major departure from our current branch design, as few branches have a dedicated space that supports customer and employee training. The two top reasons for the lack of uptake in banking technology are: 1) difficulty understanding how to use the technology; and 2) concern over security. However, both problems can be overcome by education, and the branch is an ideal place for training.
Areas for sampling smartphone technology, viewing video instruction, or even for perusing traditional printed instructional materials can go far to educating our customers on bank technology. If you are investing in banking technology, doesn’t it make sense to have a dedicated space to support such an effort?
To that point, most community banks are about service, and getting usage up on mobile banking is critical to reducing our delivery cost. Banks need to do a better job at educating their customers with a dedicated space that allows more interactivity. Putting a teller line or a desk between you and a customer creates an unneeded barrier that is not conducive for education. Further, in 90% of the branches we toured, there were virtually no clearly viewable dedicated instructional help on banking technology.
IVT Usage
Interactive tellers, those pumped-up ATMS with video capabilities, will be prominently featured in branch design either as an augmentation to the staff or to handle the overflow at peak traffic times. These tellers can not only cash checks, display and execute simple documents, send wires and provide a wider array of services, but can also connect customers with a specialist via video that can discuss items like estate planning, wealth management, mortgages and other lines of business in a secure and private manner. Creating that space to conduct that private interaction expands your branch’s capabilities for little additional cost.
7 Things You Must Get Right
While branches are shrinking, getting more efficient, and employing better technology, many elements of branch design remain unchanged for the past decade. Be aware of the areas that many branches get wrong:
- Consistency vs. Community Balance – Most branches get this wrong. Either the branch is too “corporate” and does not take into account the local community, or they tilt the other way and are too unique, losing their corporate brand support. Banks should strive for a 75% corporate / 25% local balance. Having a strong local-themed mural, set of old photos, an awards wall for local youth sports teams, a place to highlight nonprofit work in the community, or a showcase of customer wares should be built into every bank. Conversely, every branch should promote the brand of the bank and share colors, logos and other elements of the “look and feel.”
- Vault Management and Workflow – Vaults are becoming less important. But if you have one, highlight the visual aspect of the vault while ensuring your workflow is supportive to branch operations. Making your bankers travel great distances or cross unsecured spaces is a recipe for problems. Consider biometric technology, which can more efficiently manage access while ensuring greater security. This new technology also has the added advantage of being smaller in footprint, so less space is required. Make sure that if you are not using this technology now, you design it in to better leverage the space in the future.
- Line of Sight and Traffic Flow – Make sure you balance marketing with branch design. All too often we found banks would place a wall with a TV right in the middle of the workflow, hurting line of sight and disrupting traffic. Not only do employees always need to see the entrance and exit points for safety, but customers need to always see the platform and intuitively understand the traffic flow. To accomplish this, put the lounge area with media off to the side, but viewable from the platform.
- Focal Point – More than half the branches we visited gave little thought to creating a visual focal point around their brand. While marketing needs its place, the brand should rule. Make your logo and design elements the centerpiece of the branch and then design marketing around it so as not to detract.
- Greeters for High Traffic Branches – While not all branches allow this, branch studies indicate that the customer forms an opinion of the branch experience 10 steps from the door, 10 steps within the door and again at the point of interaction. Having a greeter within 10 steps from the door has a dramatic impact on satisfaction and the user experience. If you doubt this, try it. The impact is easily discernable. Further, if possible, have the teller line or account platform 10 steps from the greeter.
- Teller Line Design – If you are going to a universal banking model, you might get rid of the teller line altogether. However, for high volume branches, a teller line is still needed as it tends to be more efficient for processing basic transactions. If you do have teller lines, give some thought to how you enter and exit. For example, if your customer chooses which line to stand in and the line is slow, the customer tends to blame themselves. However, if the bank forces them into a single line or the bank assigns the line, then customers tend to blame the bank. Thinking through wait times and what occupies the waiting customer’s attention, and ensuring clear ingress and egress from the teller platform helps create a positive experience.
- Excess Space – These days, many branches are too big for their traffic. This can be felt from the customer’s point of view, creating an “empty” or “cold” experience. If you cannot fill the space with employees, then bring in some walls to close down the area. Or consider ways to create a joint space to bring in a coffee shop or other high-traffic retailer. You may have the perfectly flowing branch, but if it feels cavernous, the lack of energy will impact the experience.
Going forward, branches will continue to shrink, signage will continue to expand, and a bank’s branch portfolio will become more diversified. A smart bank will create a portfolio of different branches to fill different needs. Sometimes a 150 sqare foot branch will be the most efficient. Sometimes a 4,000 square foot branch will get the job done, while sometimes a 25,000 flagship branch may be called for. As real estate becomes relatively more expensive compared to technology, every bank must consider how to use every square foot of space, since branching is a bank’s highest functional cost.
Visiting a branch should be a memorable experience. It should add to your day and give you an emotional connection to your bank. It is so important that bankers need to spend time and map out the experience for each branch “use case” or activity. Cashing a check, opening an account, learning about a 401(k), and the like should all be thought through. It’s important to understand where customers walk in, wait, what they do when they wait, how they interact with the staff, and how they exit. Branch design isn’t rocket science, but it needs a certain level of thought.
Chris Nichols, who is located in San Francisco, is the chief strategy officer of CenterState Bank, which has its headquarters in Winter Haven, Fla.