Bank branches are getting a much-needed face-lift for the digital era.
While the overall number of branches has declined dramatically in recent years, several large banks are instead giving them renovations and tech upgrades as they realize that many consumers still want a physical location to visit to help them with their financial problems.
“One million people walk into our financial centers every day,” said Charles Liu, chief of branch transformation at Bank of America, at Retail Banking 2018 this week. “That's a lot of people, a lot of interactions for us.”
Most — 85% — of the bank’s 24 million active mobile users have used one of the bank’s branches in the last 30 days.
And BofA isn't alone. Other institutions, including Citigroup and Union Bank, are taking their own path. Following is a look at how each institution is trying to reinvigorate the bank branch.
Bank of America
One technology Bank of America has invested heavily in for its branches is videoconferencing. In September, it began rolling out Advanced Centers, which are small branches, 1,200 to 2,000 square feet, equipped with videoconferencing and sensors, but no people.
“You can go into an Advanced Center and interact with people via high-tech video, and be able to do anything you'd normally do in a typical financial center,” Liu said.
Overall, the bank plans to set up 500 new branches and renovate 1,500 existing branches over the next three to four years.
It currently has 4,478 branches. Ten years ago, it had 6,100. “We've been optimizing the financial footprint, eliminating a lot of redundant financial centers, like many other larger financial institutions out there,” Liu said.
The new renovations will be customized to local markets and demographics, he said. For instance, the bank has created 162 cobranded branches with universities.
“You walk into, say our branch at the University of Georgia, and you'll see the Bulldogs, the university logos and branding everywhere,” he said. “The furniture color is bright red. At UCLA, you’ll see that school’s colors of blue and gold and the UCLA logo, the Bruins. We're doing a lot to tailor the experience for our clients — in this case, students and alumni and faculty.”
In low and moderate income neighborhoods, there’s a focus on education, with seminars given in large conference rooms.
Union Bank’s year-old bank-within-a-bank for deposit harvesting, PurePoint Financial, has made some tech-savvy moves with its branches in Dallas, Houston, Miami, Tampa Bay, Chicago and New York.
For one, it’s made them completely paperless. PurePoint set up its own core system (from FIS). There’s no cash, no vault and no paper processes.
“We decided to stand up a new platform we felt would be more future-proof versus trying to make a U-turn on a cruise ship on a core banking transformation, which we're also doing as well,” said Adam Weisner, head of client services at PurePoint.
PurePoint’s role model for its branches is Apple, which doesn't have cash registers and instead uses all employees as salespeople.
“It’s an augmented experience focused on service; they hire a certain type of person,” Weisner said.
It has also modeled its in-branch technology on its online banking software. For instance, the seven-minute account opening it created for online banking is the same at self-service terminals customers can use in the branches. This is meant to not only make account opening in branches more efficient, but also to help customers understand how online banking works.
In its first year of operation, PurePoint gathered just under $4 billion in deposits and 25,000 new accounts.
Citi experimented with compact, tech-heavy branches that feature many ATMs and self-service kiosks and only a couple of employees, but has since dropped the idea.
“We were not satisfied with the customer utilization trends we saw there,” said Dena Roten, head of the U.S. branch channel at the bank. “So we're regrouping," she said. "If customers walk into a retail space, they want a human interaction. So walking into a space where you can't access a human is not something we're sensing customers want. If it's too slick or the way to get it done is too hidden, our experience is they'll go somewhere else where the experience looks more familiar to them.”
Citi does use beacon technology in several of its New York branches through which it has the ability to know when a customer is approaching or entering a location.
“We're doing some experimentation with how we can leverage that to be better prepared and to make sure the customer is aware they can pop in, get a free cup of coffee and chat with someone,” Roten said.
It’s given iPads to branch staff so they can roam around rather than being tied to a desk. It offers video connections to some specialists, though the bank makes an effort to have knowledgeable human beings in each location, and to have bankers travel to customers’ locations to meet face to face.
It’s also working to eliminate paper in the basic account opening process. Citi has been training branch staff to be proficient with the bank’s technology.
“When a customer is seeking out humans, it's because they have a need they can't self-satisfy,” Roten said. “They're looking for a level of competency higher than their own, so we need to make sure our bankers have that level of broad acumen and can add value to each interaction.”
It’s also been experimenting with short, gamified training modules it calls “micro learning bursts.”
“We have a lot more millennials in the workforce and having them sit in a classroom for hours is not stimulating, it's hard for them to absorb that much content in one sitting, even if they wanted to,” Roten said.
Employees get points for successfully completing training sessions that can be traded in for Netflix or Starbucks cards.
Citi recently conducted a pilot with Samsung where customers could try virtually climbing Mount Everest using the tech vendor’s virtual reality headsets. The bank segued from that to conversations about vacation planning. The bank plans to conduct more tests like that with vendors and with local retailers who might temporarily get space in its branches.
Where some banks try to incentivize customers to not come to branches to save money, Roten says Citi doesn’t have an objective of weaning people off branches.
“We think customers value having a place to go when people are having trouble with something on the mobile device and intimidated about having to ask their kid how to do it,” Roten said. “They do like having a place to go where they can get educated about how to do things on their mobile phone.”
Citi has no plans to add to its network of 680 branches in six markets, Roten said. But it still considers branches important to customer relationships.
“Our insights and data tell us when customers have a big decision or a big problem, they still stress humans far more than they do digital and they need that validation,” Roten said. “Humans in a physical setting are still important to them in that way.”
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