Branch of the Future? I Hope Not!
I was in Atlanta, Georgia, for a series of business meetings, and happened to be at a trendy restaurant near the Federal Reserve Bank in Midtown. My breakfast meeting was ending, and as we were discussing the state of branch transformation in financial institutions, my guest suggested I check out the new Bank of America branch. As I had time, and it was just a few blocks away, I decided to walk over. On the corner of Peachtree Street and 12th Street NE (Note: does anyone know why there are literally dozens of Peachtree Streets in Atlanta?), the front is all glass, befitting of the storefront model many new branches are adopting. Inside, either by structural necessity or by choice, there was a small area in the front dominated by two video tellers:
Across from the video tellers on the opposite wall was a rectangular check-writing station, which was odd, I thought, both in placement and in necessity. A wall perpendicular to the video tellers forced you to move to the right as you passed, which then opened up into the rest of the “store,” like so:
The concierge desk at the far right of the picture would be where a BofA associate would greet you as you came around. So, with their setup, you could come in, access the video teller immediately, and exit without interacting with anyone except for the associate online. Or, you could come further into the store and then, separated from video teller experience, talk with an associate.
As it turns out, at the time of my visit, there was no associate at the concierge desk. In fact, I could see no one anywhere in my field of vision. I walked to the far left and around the corner, and I finally saw one person in an office, talking on the phone. I walked back out towards the concierge desk and, from the back hallway, an associate emerged and greeted me. I explained that I was curious about the branch, and she professionally and courteously shared with me the concept of the new BofA branch and how it was working.
As it was mid-morning and there was only one non-associate in the store, I wondered aloud about the level of engagement this branch would engender. Specifically, would someone who had use of BofA’s extensive online access channels need or desire to come into this location? Were they hosting any events at this store to specifically bring in customers who didn’t need to engage in a bank branch or attract prospects? There were none specifically planned.
It appeared this was an effort to align the branch to the Damocles Sword of Efficiency Ratio. “How inexpensively can we staff this location that aligns with the dramatically lower in-branch visits?” seemed to be the prevalent thinking. I consider it a self-fulfilling prophecy. Without any specific reason for a branch or store visit, there is less branch traffic, which drives the need to lower costs, which means more video tellers and fewer in-store staff, which means less engagement, and so on.
Maybe this small footprint, low-engagement model will turn out to be the winning strategy — I think not. I talk and write frequently about the model of the Apple Store and how they encourage engagement, creating raging fans. I recently spoke with an industry expert who said the Apple Store was not a good model since they sell consumer electronics while banks sell CDs and loans. His thinking is endemic in the financial services industry. It’s almost as if we are so convinced we have such uninteresting things to sell that trying to envision a different model for branch (re: store) visits is a waste of time, so why not just make it as inexpensive as possible? Apple is not successful because they sell consumer electronics, though: their stores are packed full while the mall remains virtually empty because they have created a place where people can have an experience with what Apple sells.
Bankers need to stop focusing on CDs and loans and start creating engaging experiences in their branches. People will come for the experience and, over time, we can change the expectations people have for what a branch visit can mean.
Think about it.
Originally published at David L. Peterson.
