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Bank branches aren't dying, they're serving coffee, beer and yoga

As people today conduct most of their banking online and pay for things with plastic cards and mobile apps, banks are having to reinvent themselves. One thing banks all seem to agree on: people still need branches. But what should the new branch become?

Bank branches aren't dying, they're serving coffee, beer and yogaiStock photo


| by Amy Castor — Editor, Networld Media Group

People tend to think bank branches are going away. They aren't. They're just evolving into something completely different.

If you have been around long enough, you recall that bank branches in the 1980s and 1990s were regal structures with high ceilings and marble floors. If you went into one, you might have seen a dozen teller stations and a queue of people waiting to deposit checks, withdraw cash and so on. Somewhere along the line, things changed.

The shift began with ATMs

The shift began in the 1980s when ATMs became widely available and stepped up in the last decade. Since the 2008 financial crisis, banks have closed thousands of branches to save costs. Now, big banks are funneling hundreds of millions of dollars into new technology aimed at luring customers to do their banking online.

Earlier this week, Switzerland bank Credit Suisse announced plans to shift its focus from branches to digital banking.

"The achievement of long-term success will not depend on having the biggest branch network in the future," Thomas Gottstein, head of Credit Suisse's Swiss Universal Bank unit, told the press, though he did not elaborate on any branch closures.

As people today conduct most of their banking online and pay for things with plastic cards and mobile apps instead of cash, banks are having to reinvent themselves. Most know they have to evolve, but into what? That is the question. One thing they all seem to agree on: people still need branches. 

"The conversation is changing," Don Elliott, vice president of customer experience at First National Bank of Omaha, told ATM Marketplace. "We've seen a shift in traffic and the types of things our customers are coming in for, but branches still play a critical role in the relationships we have with our customers."

As the focus shifts to the customer experience, branches have gotten smaller. Now they are more about brand building and establishing trust. In many cases, customers still want to talk to real people, but as Elliot explained, it's about having conversations with people on their terms. 

Social gathering spots

Some bank branches are turning into social gathering spots. As an example, Capital One has been rolling out its Capital One Cafés. The spaces are a mix between a bank and a coffee shop, meant to make the banking experience feel more casual. Visitors drop in for coffee and Wi-Fi, while bank employees roam about ready to answer questions and steer customers online.  

Capital One isn't the only bank trying to create a community experience. A few years ago, OBee Credit Union in Washington began experimenting with pub-themed branches, where you could go in and get a beer, and talk to a company employee about banking.

Even as far back as 2014, Umpqua Bank in Portland dropped the word "branches" — it refers to its outlets as "stores" instead. The bank is now reimagining the branch as a community center, where people are invited to hang out, use the meeting rooms for their own business projects or even for yoga classes.

"Finances are intimidating for people, and banks have followed that model by creating an intimidating and chore-like experience," Eve Callahan, executive vice president of corporate communications at Umpqua, told Future Branches. "Why can't we create a banking experience that's approachable, engaging, and fun?"

Branches are now more about being there for customers when they need you. Elliot believes that is where the biggest transformation is taking place. "It's about banks making themselves more available to customers in the way they want to interact," he said. 

Elliott will be speaking on the panel "Transforming Bank Transformation" at BCX Summit in Chicago, Sept. 23-25. You can register here


Amy Castor

Amy Castor has more than 20 years of experience in journalism and mass communications. In the last several years, she has gotten particularly interested cryptocurrencies, blockchain technologies and other evolving forms of payment. Her work has appeared in consumer and trade publications throughout the U.S., including CoinDesk, Forbes, and Bitcoin Magazine. She is now the editor of ATMmarketplace.com and WorldofMoney.com

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