As other banks grapple with the issue of branching, Seacoast Banking Corp. of Florida (SBCF) is letting its creativity run loose.
The Stuart company has opened five offices in the last three months, called "fuel cells," to focus on small businesses. The aim is to foster more collaboration between commercial clients and Seacoast employees.
Seacoast's executives are quick to note that the offices, branded as Accelerate, are not retail branches. All of the transactions are completed electronically or through an ATM. Instead, the staff focuses on advising Generation X business owners, usually between 30 and 50 years old.
"Younger entrepreneurs frankly may not have had a positive experience with banks in the past," says Dennis Hudson 3rd, Seacoast's chairman and chief executive. "But you can walk into one of our offices and [our employees] will give you advice right on the spot."
Foot traffic in branches has declined in recent years, prompting several banks to experiment with features designed to better serve customers. Umpqua Holdings (UMPQ) hosts events such as yoga classes and book reading. Berkshire Hills Bancorp (BHLB) has added community rooms to some branches that include video game systems.
The troubled First Cherokee State Bank in Woodstock, Ga., took a risk by using some of its capital to rebrand itself with a more hip vibe that included a coffee bar. The Hail Mary fell short; the bank failed last summer.
"You will see branches and offices becoming more targeted toward small businesses and affluent consumers," says Mary Beth Sullivan, a managing partner at Capital Performance Group. "Everyone is targeting the same folks now, so how successful that will be remains to be seen."
In developing Accelerate, Seacoast studied its target demographic and other banks that were successfully developing their franchises, says H. Russell Holland 3rd, the $2.2 billion-asset company's chief lending officer.
Seacoast found that high-performing banks hired talented staff, empowered employees to give advice, provided a platform to do business and focused on a specific segment of the market.
Seacoast originally focused on residential mortgages but has moved into more commercial lending over the last decade, says Jefferson Harralson, an analyst at Keefe, Bruyette & Woods. The company offers many fee-based services, like trust and insurance, that help it strengthen ties to commercial customers, he adds.
"Seacoast has a history of reaching out to customers in unique ways, and they are well connected in their communities," Harralson says. "Banks are using small business as a way to replace some of the commercial real estate loan portfolio they have lost."
Accelerate's targeted demographic likes "empowerment and engagement, so we have tried to develop a process that allows that," Holland says.
The physical aspects of the offices feature open floor plans that offer space for collaborative work. Teller lines were replaced with a coffee and wine bar. Other features include lounges with leather couches, video screens for presentations and access to Skype.
To make sure that business owners receive the right advice, Seacoast placed some of its most-experienced bankers in the Accelerate offices. Seacoast is also making underwriters, which it calls analyzers, readily available to answer questions about proposals.
Not every customer session results in a pitch. Holland recently participated in a conversation with a business owner where Seacoast's staff outlined a plan to raise equity and to develop a five-year growth strategy. The recommendations did not involve applying for a loan.
Though the offices are relatively new, Holland and Hudson say they are pleased with the early results. Seacoast has landed a "significant amount of business already, including deposits, so it is not just loans," Holland says.
Accelerate's design and philosophy could eventually influence how Seacoast approaches its retail branches, the company's executives say. Seacoast has 34 branches in 11 counties along the southeast coast and central region of Florida.
Redesigning branches and offices with more automation and customer friendly touches is important, but those changes do not guarantee success, Sullivan says. A bank still needs to provide great service and expertise.
"It's not a case today where if you build it, they will come," Sullivan adds. "You need people with credit expertise in those offices, and intelligent conversations need to take place on the spot."