By Evan SparksBanks have done a lot to become less physically intimidating over the decades. The Doric stone edifices and teller cages have been replaced by floor-to-ceiling glass windows and roving universal bankers who work on a tablet. Some banks have even turned branches into coffeehouses.
But for someone who has never had a bank account, a bank can still be an intimidating place. Financial products and terminology are sometimes unfamiliar even to seasoned bank customers. Unlike alternative financial service providers like check cashers, banks rarely have a “price list” posted in the lobby, points out urban policy scholar Lisa Servon. Even the suits and ties that many bankers wear can make a potential customer feel out of place, according to surveys of the unbanked conducted by the FDIC.
To make financial services a little less intimidating, many banks start with youth—through the programs of the ABA Foundation, for example. (Teach Children to Save, celebrated every April, brings 12,500 bankers each year into classrooms for financial literacy lessons.) But an even more powerful force is turning the students themselves into ambassadors for healthy financial choices.
Student to student
Capital One is one of many banks that operates branches in high schools that are staffed by students. “We have a peer-to-peer education model,” says Lakia Williams, a senior manager on the community development banking team at Capital One. “The student bank leaders understand that financial education is cool and a key to future success, and that resonates with fellow students new to the program. It’s very different from having a banker like myself go in and deliver a lecture-style series.”
Capital One today operates four high school branches: one each in the Bronx; Manhattan’s Harlem neighborhood; Newark, N.J.; and Prince Georges County, Md. The first branch opened in the Bronx in 2007, where some employees at North Fork Bank (later acquired by Capital One) had been active teaching financial literacy. By opening a branch there, the bank complemented the financial literacy program by having “students put what they learned into practice by opening a bank account at a bank branch in their school,” Williams explains.
Each Capital One campus branch is staffed by 10-12 “student ambassadors” plus one dedicated Capital One full-time employee to oversee things. The branches are open three days per week, four hours per day. The branches, which include a small teller line and desks for relationship bankers, range from 300 to 1,000 square feet and fill any space the bank can find: storage, unused offices, even an old wood shop.
The training process is rigorous. Capital One hires rising seniors during the spring of their junior year, and they spend the entire summer before work training, both in the classroom and side by side with Capital One employees in neighborhood branches. They also complement their bank operations training with guest visits by senior executives and managers, financial literacy workshops and a budget scenario competition. “By the spring semester of the school year, they’re sharing their newfound knowledge with fellow students,” says Williams. “They have the messages, they understand it, they practice it, and now they’re ready to deliver it to their peers.”
Locking in a banking relationship
For Julieann Thurlow, president and CEO of Reading Cooperative Bank—a $562 million mutual in Reading, Mass.—the two high school branches Reading Coop operates help them generate a sticky relationship with students as long-term customers.
“What we found is that the high school branches are the opportunity for us to actually open accounts with young folks when they’re 16 or even younger and get them integrated in the bank, provide them all the financial technology services so they never have to leave us, and also create that positive warm relational approach to banking that a community bank provides,” she explains in a recent ABA Banking Journal Podcast interview. “And those kids don’t leave.”
This is a change from before the mobile era, prior to which students who graduated and left the area would move on to a bank in their new hometown. “Ever since we launched our mobile app, we have not seen those seniors leaving us when they leave the community,” says Thurlow. “It’s been a win for the students and it’s been a win for us as well.”
A talent pipeline
Windsor Federal Savings, a $495 million mutual thrift, operates two branches in majority-minority high schools in its home market of north-central Connecticut. The program “evolved in ways that we didn’t expect it to,” says George Hermann, Windsor Federal’s president and CEO, on the ABA Banking Journal Podcast. “We initially did this for financial literacy. What it’s turned out to be is job training, introducing students to careers in banking.”
The program turned into a new avenue for recruiting talent at Windsor Federal. Of the 65 students that had gone through the program as of early 2018, 22 of them had been hired into another role with the bank. One student completed community college and a four-year degree—earning a spot on the dean’s list—while working for Windsor Federal and now splits his time between accounting and credit program, says Hermann. “The students who are involved in this program have a much higher rate of attending college.”
Capital One also pairs its on-the-job training with a strong college prep component, providing a college consultant for their student ambassadors. Thus far, 94 percent of program participants are going on to college, and they have an option to continue on part-time with Capital One if they go to college in the bank’s footprint, according to Williams.
She adds that the bank is “looking to hire diverse students in the program,” including those “who may need a second chance.” Williams recalls one young woman who was selected for the program even though her grades weren’t as strong as some of the other candidates. Working in the in-school branch program helped her transcend a tumultuous family background, and she went to college and now works as an account executive at a major social media company.
This young woman credits the financial literacy training she had for setting her up for success. “She’s working in New York City, and she talks about how her colleagues are constantly going out,” Williams reflects. “She’s conscious of it and she brings her own lunch most days to save money!”