Bank Up and Smell the Coffee

Kris Carrera
Business Line Executive, Credit
Posted on September 15, 2016

Young business woman holding mobile phone and credit card. Woman pays for a purchase with credit card. Purchase online. Shopping online

Reinventing the branch for a new generation of banking

Fresh ground coffee. Comfy sofas. A pastry counter. Your local coffee house? Hardly.

Welcome to the new face of branch banking.

Branch Network Malaise

Bank branch networks have been under attack since the early days of telephone banking back in the early 1990s. PC banking, internet services and bank apps have seemed to accelerate their inevitable demise. Now, we hear how millennials prefer a visit to the dentist over a visit to their local branch. Not everything can be done virtually, however. More complex services often need personal contact, and that means brick and mortar outlets.

What can banks do to attract a new generation into a banking center? Branch innovation has been tried, it’s commonplace to see micro-branches in supermarkets, transport hubs or shopping malls. Surely, we can do better.

Reports of the Death of Branches May be Premature (again)

In our digital world, the first response is to use technology. Great strides have already been made through the introduction of advanced virtual tellers. Unmanned kiosks can automate the credit checking and KYC process based on a scan of the visitor’s ID card or driver’s license. Going far beyond standard PC-, web- or app-banking, virtual tellers offer a standalone, smart option for retail locations offering advanced services such as approval of personal loans, account opening, card application plus normal ATM capabilities.

But that still doesn’t address the issue of the eternal need for some level of personal contact. What can banks do to reinvigorate the traditional branch?

An emerging trend is for banks to infuse their branch with a more relaxed, café-style atmosphere, Perhaps, even operate a branch within an established coffee outlet. Out goes the bulletproof glass wall and in comes puffy sofas, powerful WiFi and pastel tones for the décor. Teams of roving tellers with tablets under their arms chat with customers at their convenience, limiting traditional banking hours. A contemporary feel and relaxed, business-like environment offers something new for branches – and something attractive to those elusive millennials

The idea of teaming up with existing café brands to share premium locations has worked well for Chase and Capital One in cooperation with Starbucks and other brands. They are finding a new segment of customers who are much more comfortable in these locations, and increasingly more open and sympathetic to person-to-person advice.

Getting Up-close and Personal

Placing micro-branches in supermarkets or malls certainly makes engaging in basic banking services more convenient, but migrating to a café-themed bank branch is a different league. The new-look branch becomes an integral part of the bank’s public brand and image – it’s a place where you might actually want to go for more than financial advice.

Cafés are now places where people, especially millennials, go to study and work. With strong WiFi on tap, they are no longer just places for a quick espresso. And furthermore, a more hybrid branch is far cheaper to create and operate than the traditional branch with the integral high-security infrastructure.

Banks have a rare opportunity to put themselves out there in a more innovative way by investing in something a little different. The result is the opportunity to get even more up-close-and-personal with established customers and new prospects. New marketing opportunities emerge, such as joint campaigns between the bank and café, paired with perfectly timed and customized product offerings through push notifications.

The emerging banking disruptors that present a clear and present danger to the established banks already offer well targeted, digital-only products and services that greatly appeal to millennials. However, without any physical presence, these alt-finance firms cannot compete with the personal touch. It is time to turn the branch network into something positive, that appeals to all generations and appeals to people who appreciate more-flexible hours, like small business owners.

The Tail Wagging the Dog

Although larger banks are the first movers in these initiatives, should smaller mid-sized banks adopt this concept? Creating national networks in partnership with national café brands may not be realistic for all, but reinvigorating an established branch network, whatever the size, can drive interest in banking services and cross-sell opportunities.

Major opportunities to cross sell to customers who are already in a conducive environment is too valuable to miss; Banks who refuse to adapt and evolve to meet their clients’ needs risk losing a whole generation of customers for the long term.

No one is saying that older generations loved the traditional bank branch – but they never had a choice. Financial advice in a more relaxed, informal environment may be just what they’re looking for too.

Would a more relaxed branch atmosphere create a better product selling environment?


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Kris Carrera
Business Line Executive, Credit

With over 25 years of international payments experience, Kris was responsible for the launch of the first successful cobranded card program. A leader in risk-based pricing and target marketing using predictive data analytics, she specializes in merchant services, credit cards and home equity. Kris has received Best Travel Card, Best Cobranded Card and Best Private-Label Program awards.