The Growth of the…Branch?


The American Bankers Association just released survey results that say that the number of Americans that prefer to bank within a branch actually grew within the last year. Americans opting for internet banking fell by 8 percentage points, while the number who prefer to meet their banking needs through ATM or mobile each grew slightly.  The ABA theorizes that recent technological advancements made within bank branches have made the channel more efficient and therefore, more attractive to customers.

Reflecting the view across the pond, Accenture released a study last month, focusing on the UK financial services industry, with similar findings–online banking remains steady, while the use of branch and mobile channels grow.

There are certainly branch success stories for community banks in the U.S., and most of these involve a transition to self-service, whether through the use of image-enabled ATMs or video tellers. Kennebec Savings Bank uses image-enabled ATMs to handle one-third of the bank’s deposits, and the machines allow the bank to expand in its market through self-service branches more cheaply  than through a traditional branch. And Conestoga Bank opens two-to-three times more accounts each quarter through video tellers. (For more on how these banks are using technology in the branch, please read my contribution to Bank Director magazine’s innovation section, “Will Video Kill the Teller Line?“.)

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LOFTy Expectations

I’m a big fan of LOFT, the lower-cost little sister to the slightly more upscale Ann Taylor, but their most recent sale probably lost me as an online customer.

LOFT ran a big sale Sunday that offered a 70 percent discount off sale items. Who doesn’t love a good deal? The sale expired at midnight, so I started to browse late Sunday evening on my iPhone. Unfortunately, I couldn’t get past browsing–the website constantly crashed. This isn’t the first time that LOFT’s website couldn’t handle extra traffic during a big sale.

LOFT Response LOFT’s response to my concerns voiced on social media Sunday night came on Monday morning–hours after the end of the sale–and instead of addressing the issue through that medium, they directed me to call an associate. Around the same time, I received a tone-deaf email advertising a 60% off flash sale email.

LOFT Flash Sale 07142014

I should note that the social media team at LOFT seems to be responsive to customers on its Facebook page. It’s true that I was disappointed that, instead of addressing the problem through social media, LOFT directed me to contact them by phone–an extra step that I didn’t want to take–but their team is just doing their job.

The real problem lies in the fact that marketing, product delivery and customer service aren’t strategically aligned.

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Decline in Branch Banking, or an Evolution?

treesroadunsplashSeveral news outlets have picked up on recent data from revealing that 30 percent of Americans haven’t visited a branch in at least six months, among them, which called it the one stat big bank CEOs are freaking out about.

Half of Americans visited a branch at least within the last month, 64 percent within the last six months and 73 percent in the last year. A request to for past data on branch visits was not answered.

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More Power to the Consumer

Do you know how your customer base wants to interact with your bank?

Yesterday I attended the Bankerstuff webinar, “Branch Transformation: Positioning Your Branch Network for the Future”. Chris Gill, Jim Flannery, and Jason Wolf of Diebold Branch Transformation Advisory Services presented some fascinating information on consumer trends.

Consumer interactions are changing. Teller transactions should decline, and ATM transactions should remain flat, by 2015. Growth will be found in online and mobile transactions, with mobile growing from 5 billion transactions in 2010 to roughly 18 billion by 2015. Additionally, consumer expectations are shifting as they interact with retailers in a variety of industries. What can you learn from retailers? How do your customers interact with you – and how do they want to interact with you?

Consumers have a lot of choice. Within the banking industry we tend to focus on the fact that the number of banks is declining, so there’s not a lot of thought put to the fact that consumers have literally thousands of banks to choose from – and that doesn’t even include the “non-bank” financial products on the market, like Bluebird. Diebold Branch Transformation Advisory Services found that 64% of consumers select a financial services provider based on the brand’s reputation. How are you strengthening your brand?

The branch isn’t dead.

  • 67% of consumers still prefer to go to the branch to make a deposit.
  • 53% prefer the branch for problem resolution.
  • 73% want to open an account, and 67% want to apply for a loan, in a branch.

The trend in the industry – the call for branch transformation – tends to focus on having a more specialized staff, with a shift in the branch from a transactional center to a service & sales hub. Banks may have to guide those consumers that still want to use the branch for transactional matters, like deposits, in order to create a more profitable branch system. Offering the right mix of branch, mobile, and online banking will help lead these consumers to choices that could be more convenient and better meet their needs – and help the branch become more streamlined and profitable.

Keep an eye on the young ‘uns. Gen Y’s and Millenials will hold the most spending power by 2017, and will conduct 40% of transactions. While only 33% of consumers consider mobile banking important when choosing a financial provide, 49% of Gen Y consumers, and 39% of Gen Z, do. But don’t discount the branch: 56% of Gen Z and 58% of Gen Y still consider the number and location of branches when choosing a bank. Where will these customers transact with you? Where will the relationship be? Are you offering the right mix of web, mobile, and branch?


PwC Financial Services Managing Director, Nate Fisher, highlights how banks can align their pricing structure by using data from customer preferences.

Mike Branton of StrategyCorps shares how to put the retail back in retail checking.

Mobile Can’t Stand Alone

Earlier this month I interviewed the team at Reliant Bank, for an article that will post Monday on The piece is a look inside the late summer release of the community bank’s mobile app, but something I couldn’t include in the story was the other efforts the bank is making to achieve growth in a tough economy. Is a mobile app increasingly becoming a consumer expectation? You betcha. But a mobile app alone won’t generate growth. What else is your bank offering its customers?

Do your customers feel rewarded?

If community banking is largely about relationships, do your customers feel the love? Reliant Bank, a newer community bank in an affluent community, offers rewards checking – not exactly novel, but something that Brian Shaw, chief retail and deposit officer, says has resulted in significant growth of the bank’s client base. Customers earn interest for doing things like using their debit card ten times a month, using online bill pay for transactions, and using online banking. Pretty basic stuff that also encourages their customer base to do more online (which probably saves Reliant money too).

Reliant also waves ATM fees – an important thing for a community bank that can’t be on every corner.

Are you reaching out to current – and future – customers?

If you’ve visited this blog before, you know I’m a big fan of financial literacy. As part of their financial literacy program, Reliant offers a popular, high-interest child’s savings account. Reliant has been able to talk to kids in the schools, and the kids are rewarded for saving with $25 from the bank (or a giftcard). Kids are taught to save – and rewarded for it – with the help of Reliant Bank.

Reliant Bank is also active on Facebook, using the channel to notify customers of new programs (like mobile banking) and for community outreach. If you take a look at their page, most of their posts over the past week are about community events, like a bake sale, customer appreciation days, and seminars available to the public.

What does your bank offer that stands out?

Reliant Bank offers a Groupon-like ‘Raving Fan’ program, connecting Reliant’s business clients to retail customers.

The ‘Raving Fan’ program features local businesses, like area restaurants. Reliant’s retail clients appreciate the discounts to local businesses, while their business clients appreciate the free advertising and connection to consumers.

I love hearing stories of banks that are doing something different. Do you know of a retail bank doing something a little different? Maybe a unique branch concept, or a branding standout? Comment below, or email me at emccormick[at]

Update: The article “Reliant on Mobile”, detailing Reliant Bank’s summer release of their mobile app, is now available.

Status Quo? Or Grow?

Yesterday I attended Celent’s webinar, “Emerging Technologies in Retail Banking”. The webinar presented the results of Celent’s research into what banks are doing – and plan to do – with technology in relationship to their growth, sales, and service.

A lot of great information was presented. Here’s a few takeaways:

The big banks are blazing ahead of the community banks.
Not too much of a surprise, as the big guys are going to have resources that the little guys don’t. That said, technology has the potential to be a great equalizer – traditional branches are costly to maintain, while technology can allow community banks to broaden their offerings and reach.

Despite technology growth – and demand – the branch still reigns supreme.
40% of banks ranked the branch as their most important delivery channel. This is despite a decline in branch use, and an expected continued decline among those surveyed.

Why is this? This wasn’t addressed in the webinar, but Celent’s Bob Meara did stress that the “status quo” in the branch channel isn’t sustainable, and redesigns at the branch level increasingly focus on sales support and service, and less on transactions. New branches also need to be smaller, more automated, and less costly.

Community banks need to catch up with the big banks in mobile.
Over 80% of big banks ($50B+) have mobile apps for iPhone and/or Android, while among smaller banks the average hovers around 50% (it’s also worth noting here that Meara warned attendees that the survey did bias slightly to technology adopters – so that true number is likely lower). As is often the case in banking, many are taking the safe route and don’t feel that can justify the ROI for a mobile app – but while these banks “wait and see”, will they be left behind?

Retail banking is a big part of the growth picture. Bank Director’s upcoming Growth Conference in New Orleans will explore strategies, tactics, products, and more.

Is checking a doomed dinosaur?

I love reading how Perkstreet Financial is using social media successfully (and it looks like I’m wrong – some banks can use Pinterest).

Bank Director’s Risk event is this Thursday – if you’re on Twitter, follow #Risk2012.

A Winning Branch Strategy

Over a recent lunch, my Dad told me how he hates his big bank. “Change.”, I said. “Too much trouble,” he replied, but when  he visits his branch “once a month”  the service is terrible.

We can debate branch vs. mobile until the cows come home – I personally see room for both, and statistics show that branch use has not declined despite an increase in mobile – but the fact remains: if your customers are visiting your branches, they expect to be served. You have a chance to make an impression – and you want your bank to make a good one.

Is your staff knowledgeable, and are they providing the best service?
Per The Raddon Report, branches are evolving. With technology, the transactions that once occurred in the branch are largely unnecessary, moving the branch to a service and sales role. Your branch staff needs to have the “people skills” necessary to serve and sell to your customer.

As quoted in my last blog post, I think John Kanas said it best: “the key to the success of any large company is embedded in its human talent”. Hire good people. Train them well. Create a corporate culture where employees feel empowered to make good decisions, and have the ability and motivation to educate your customers about the best products your bank can offer them.

This article offers a list of ways to improve service, but I think my favorite is this one: Sell at the desk, not at the teller line. If you’re going to bring them into the branch, take the time to serve them. Educate the customer about your products and what’s right for them. Are you meeting their needs? If so, they’re a lot more likely to come back.

It’s All About Timing
Are you available when your customers need you? Are you staffing your branch adequately? When are the peak times for your branch?

One innovative way to expand hours without extending personnel: video tellers. Coastal FCU has converted its entire branch network to video tellers, and their CEO states: “The system allows us to serve members faster, handling peaks in branch activity more effectively. It also makes it easier for us to extend our hours of operation and lower the cost of adding new branches.”

Think outside the box, er, branch.
Consider working with local businesses to promote each other and make the customer even happier. When we refinanced our house last year, after dotting our i’s, crossing our t’s, our very friendly and helpful banker handed us free tokens for a restaurant our kids love. Texas Roadhouse was able to promote their business, and we came away feeling like we’d been given a little gift from the bank.

Interested in more branch goodness?
Want to sell better in your branches? Here are some tips.

Worried about branch profitability? Expand your services to maximize profit.