Ideas in Action: Branching OutNovember 22, 2017
By Kate Young
You know the incredible community buzz thats generated when a new bank branch comes to town? No? Youre not familiar with that experience? Maybe its time to talk about how to change that.
For bankers, branch strategy is a perennial discussion point. In this space alone, weve looked into the so-called branch of the future, the ways banks might reclaim the status they once enjoyed in their communities, and how branches should adapt to the ever-increasing dominance of digital banking.
Still, though, most of the stories out there are about branches scaling down. Bank of America has even introduced branches that are entirely unstaffed.
And its true. Branches everywhere are shrinking and disappearing.
But what happens when a bank flips the script and turns its branches into something more instead of less?
Financial issues touch the lives of consumersand communitiesin many ways. Can the branch go beyond traditional banking activities to address the needs of its customers and neighbors at multiple touchpoints? It might be a matter of giving community members a welcoming space to work, meet up, or relax. It could mean providing an outlet for education. Or the kind of recreation and entertainment that builds connections. Or even opportunities for local small businesses to display their wares.
No need for flights of fancy here. For years, Oregon-based Umpqua Bank has been successfully pioneering the frontier where banking meets retail, hospitality, and community service. But theres no magic bullet. Umpqua management is quick to point out that the special offerings at its 300+ storeswhether yoga classes, pop-up shops, or lecture seriesare specific to the needs of the immediate community surrounding each branch.
Sospecificallyhow has this approach translated to other banks in other communities? Lets take a look.
- Caffeinated branches. What is it about coffee that seems to pair so well with banking? The ABA Banking Journal recently took a fresh look at the bank café model. The concept has percolated across large banks, such as Umpqua and Capital One, to smaller community banks, like Richwood Bank in Ohio and HomeTown Bank in Minnesota. The hook? That cup of joe is going to make you slow down, get comfortable, and take a moment to reflecthopefully on your finances.
- The branch that serves brunch. An NPR broadcast of Marketplace recently asked, Would you eat lunch at the bank of the future? Sounds like an overwrought metaphor, but its not. Deutsche Bank in Berlin takes the bank café concept a step or two further by serving breakfast, lunch, and pastriesas well as offering short-term babysitting, co-working space, gallery exhibits, and financial advice. But no cash. For that, you have to hit the ATM around the corner.
- The branch that comes to you. Youve heard of banking deserts. Fifth Third Banks Financial Empowerment Mobiles (or eBuses) tackle that problem by driving banking services directly to underserved areas. More than just a vehicle for transactions, the eBus aims to deliver personalized, professional financial evaluations and advice to people who dont otherwise have access. In August, an eBus toured southeast Michigan, with 11 stops in Detroit.
- Branches that anticipate special needs. You may not think of the average bank branch as a potential source of sensory overload. But for people with autismand their familiessimple errands to the bank can be painfully overwhelmingcreating a spiral of avoidance and isolation. Thats why Regions Bank has been moving toward making its 1,500 branches autism friendly. Sensory inclusive kits with earbuds, sunglasses, and stress balls help create a calming environment. But more importantly, staff training helps remove the stigma that prevents many consumers from engaging.
- The branch as resource center for community groups, charities, and entrepreneurs. Bank of Irelands Grand Canal Square branch, Lead Banks Crossroads location, and Field & Main Banks redesigned centers in Henderson and Cynthiana, Kentucky all incorporate multipurpose spaces designed to bring the greater community into the branchand provide reasons for people to stay.
- The branch as VIP lounge. Oh, Richard Branson, why is it always you who follows through on such big ideas? Virginthats right, the global brand best known for its record store, airline, hotel chain, telecom, media, philanthropy, and (ahem) space programis also a bank. But the Virgin Money webpage asks, Why bank when you can lounge? Indeed, seven of the banks 74 physical locations in the UK are Virgin Money Loungesplaces where you can watch a movie, bowl, attend special events, or just hang out in style. To be eligible for membership at a Virgin Money Lounge, all you have to do is be a bank customer.
- The branch that keeps on giving. Of course, branch strategy is only partially about what a branch can provide. Sometimes the central issue is whereand how denselythe branches are located. When First Federal Bank of Wisconsin in Waukesha, Wisconsin found that its branch footprint no longer made sense, it gave away the store. But in a good way. By donating a redundant facility to La Casa de Esperanza, a local nonprofit with close ties to the bank, First Federal was able to refocus its resources while at the same time providing a transformative gift to the community. La Casa repurposed First Federals former branch to houseappropriately enoughLa Casas Center for Financial Stability. This initiative provides financial literacy and entrepreneurship education, job training, and tax advice to low-income individuals seeking economic self-sufficiency.