Asset Based Lending
Chief Investment Officer
Commercial Loan Automation
BirdsEye Viewbranch design
At the Retail Forum we spent time discussing branch transformation and branch design. We went well beyond the usual square footage and pods discussion, and explored other elements that could be critical to your success.
I will not share all that we said – you need to attend the Forum to get the full picture – but would like to give you some ideas to spur your design thinking.
· Unique look.
Take the Apple stores, for example. Their design, like everything else Apple, is simple, clean and uncluttered. There is nothing fancy about it. Merchandise is clearly displayed, and there are lots of people who can help you and who are easily recognizable because of their distinctive blue shirts.
These stores are immensely successful, surely in large part due to the Apple products displayed in them. But is that the only reason why folks like to visit the stores? Give it some thought. What elements can you take from the Apple design and input to your branches, if it fits your brand? Brand Banks in Georgia borrowed some of these elements to yield great success in both metro and rural markets.
· Use of technology.
Technology has been integrated into our branches in recent years, but not very effectively. Many of us have touch screens, iPads, calculators, tech bars etc., but customer usage is often disappointing (except for the kids who love to play with those iPads while their parents are doing their banking).
Further, many use large touch screens to project messages; these might not be understood by the customers as interactive tools for self-service.
I believe our technology message is mixed, and often calls for self-service. Even Apple has their Genius Squad to help us with their simple products. Our customers certainly could use assistance from humans in utilizing our technological solutions and learning how to benefit from them. Pairing people and technology is a winning combination.
Some banks, notably WSFS, employ the principle of modularity in all branch design. They believe that the branch configuration will continue to evolve, and modular units facilitate seamless, fast and inexpensive shifts as the market and customer tastes evolve.
Another use of this principle is in designing branches that can be full- service part of the time and self-service after-hours, using glass partitions and effective technology placements. Your ITMs can be shut off from the rest of the bank, for example, to offer 24/7 service including remote personal interaction, thereby offering customers an effective bridge between banking yesterday and banking tomorrow.
· Tech plays in ALL markets
I had the misconception that technology is accepted primarily in bicoastal major metro areas. I was wrong. Acceptance of technology is broad-based across the country, and effective placement in the branch has been proven to be a competitive advantage for some banks. Many customers are using technology across many facets of their life, and banking need not be an exception.
· Use of lights
It is amazing how light can change a feeling. Well-lit branches, especially those that are glass-walled, create a sense of openness and airiness which many customers value. Light can also be used to display messages on the floor, from CD rates to a rope-less teller line. It’s an interesting and available design element which we do not use much – but we should.
· People still make all the difference
The best-designed branch will fail if it is not staffed with quality people. We should not forget that, at the end of the day, our business is still all about people. It needs to be said.
· There WILL be branches, just not so many
Some people predict we will have no branches in five years. I disagree. We should have fewer branches – our overall system branch density is uneconomical and untenable – but we do need branches. Other retailing companies, most notably Amazon, elect to add physical distribution when it appears they already have the perfect remote distribution system. There is a reason for it. Customers like to know there is a place they can go to when problems arise or when they’d like sensitive or weighty advice. Our issue is density – not the branch itself.
· Use design principles
Any project or strategy need a definition of success, a destination and a goal, to be successful. There should be a philosophy behind it. Design principles offer that foundation for your branch design. They are general principles that guide your decision-making regarding branch configuration. Examples:
o Off stage/on stage areas – some banks have customer-facing (on-stage) areas segregated from the off-stage (back of the house) areas. This idea has much merit, because busy people in customer-facing areas who aren’t handling customers aren’t perceived to be busy but neglectful of the customers waiting to be served. Creating separation addresses this issue. Some even use one-way mirrors to ensure that, if lines do form in the front of the house, bankers will stop backstage work and move forward to handle customers.
o Living room
Some banks have “living rooms” or “comfort zones” for their customers. They find these are better spaces to engage customers in conversation; they are comfortable and informal. Interestingly, customers are often less sensitive to their privacy than we are…
Organizing the workflow, handoff and other aspects of branch operations across the branch is called by some “The Dance”. Dances need to be choreographed, and branch design must withstand the test of effective choreography. Can bankers and customers move across the space easily and intuitively, for example?
This is an example of a useful principle that will impact your choice of desks, pods and other design elements.
· Branch lab
Some banks built branch design labs where they can test design concepts using plywood and other materials to actually build out design concepts on-site. These are especially relevant to test customer flow and develop the “choreography” of the staff. It allows for meaningful experimentation without customer impact or incurring fixed cost. I personally really like this idea.
· Out-of-the-box thinking
One bank in a university town built a branch with a movable front glass wall which can be totally open. They installed a large TV screen and sofas in the bank, and became a place for students to hang out and watch sports, not to mention to their banking. Sounds odd? I think it’s spot-on. Localness can be defined in many ways, and fitting into the university scene is a good example of that.
Plus, we have been working so hard to find ways to make the branch a destination, a welcoming place. This design facilitated that by offering openness and complete access.
This design is original and interesting, and makes great sense in its market. It is ideas like this one that separate branch design innovation from the rest of the crowd.
· Colocation still work-in-progress
Colocation gets a lot of talk, but I have not seen many successful examples of effective execution. It’s a great idea, and I’m not sure why it’s so difficult to implement. Have you seen good execution of this concept? If so please tell me about it.
A lot more can be written about branch design. Underlying it all, though, there are a few tenets:
1. Changing the physical layout will not bring about change unless you change what you’re doing within your physical space.
2. Design using a few key principles that are universally applied regardless to location specifics will achieve customer experience consistency, efficiency and employee modularity.
3. Use the same choreography to create customer experience consistency across branches.
4. The branch is a key element in your brand promise. Make sure the design reflects both your brand and your market, as do the people, products, and even the dress code!