A branch recently opened on a college campus in Massachusetts is a microcosm of forward-looking trends in retail bank design. Emphasis on the "micro."
The Eastern Bank branch takes up all of 350 square feet at Northern Essex Community College in Lawrence. Packed into the space are: a tablet bar; a room behind glass that can frost for privacy; outlets for students to charge their phones; and 50-inch touch screens streaming financial literacy-themed games and product information.
The branch is even smaller than most in-store supermarket branches, which typically range from 450 to 500 square feet, according to Dave Martin, executive vice president and chief development officer at Financial Supermarkets Inc.
The tiny model comes at a time when banks nationwide are exploring new ways to make branches more efficient to tackle a conundrum: transaction volume continues to decline in a business channel that still scores the most product sales of any other. Many financial institutions are slashing square footage to cut back on costs.
More banks are expected to experiment with tinier and techier models as they continue to work to make the channel more about sales and service rather than transaction hubs.
"There is an overall movement to make branches smaller," said Genie Driskill, chief operating officer and senior vice president at Synergistics Research Corp.
Eastern's unconventional branch, opened Oct. 1, is only 450 feet away from a traditional branch it opened in 2011. They are located in a lower income area of Massachusetts, which had lacked a bank opening for 23 years until Eastern opened its first branch there.
The tiny glass-enclosed branch sits near a campus bookstore and a restaurant. But the $8.8 billion-asset mutual thrift sees the space as more than a way to capture foot traffic and deposit accounts from an area where people are eating pizza or shopping for textbooks. Eastern also sees its investment as a way to foster better education about finance and to carve out a high-tech space for students to use in between classes.
"It's part of giving back to the community," said Robert (Bob) DiGiovanni, senior vice president and director of retail banking at Eastern Bank.
In addition to the digital game in the branch, Eastern partnered with financial education company EverFi and will soon offer online classes on financial literacy topics like building credit scores or avoiding overdrafts. Students who complete the course will be entered into a drawing to win a scholarship, and Eastern Bank plans to give away at least ten $1,000 scholarships.
More standard transactions are available at the branch, which also has an ATM, one full-time employee who can help open new accounts, and videoconferencing for visitors to access offsite experts. Personnel can come quickly back and forth from Eastern's other location if needed. The experience, however, is designed to be very different from the typical bank visit.
"It doesn't look like a traditional branch. It doesn't feel like a traditional model," said Rachel Concepcion, general manager of the bank's two branches in Lawrence. "If someone has a question about a product, we don't open a brochure. We go to a digital screen."
The bank should have an opportunity to have an ongoing conversation with students, too.
Synergistics data shows that more than half of college students say the branch they visit most is the one located on their campus. Already, Eastern reports that study groups are using the space to prep for classes.
If the new branch is successful, Eastern could replicate aspects of the new model at other locations in addition to its other ongoing branch transformation work.
Eastern Bank is also testing video teller machines in addition to its work to convert the majority of its branch personnel into "universal" bankers skilled at a variety of tasks underscoring the continued significance of the channel.
"The branch is still relevant," said DiGiovanni. "Branches just have to change."