Easy Access

Banks are swapping teller lines and velvet ropes for digital kiosks and coffee machines

Back Article Aug 11, 2014 By Esther Shein

With its bistro tables, coffee machines, wi-fi and open windows, Rabobank might give the impression that it’s in the business of biscuits and lattes. But in actuality, the Roseville-based bank is experimenting with a deconstructed floor plan that scraps security guards and teller windows in exchange for a layout that better meets the demands of today’s tech-smart customers.

Whether it’s newly designed branches — or banks without branches at all — the banking industry is undergoing a physical transformation as consumers seek improved customer service and more digital options.

Rabobank, with $12 billion in assets and 120 branches in California, surveyed its customers and found that most perceive standing as the most efficient position from which to conduct business quickly. So Rabobank designed freestanding, digital kiosks that consumers can use for speedy transactions. If a customer wants additional information or assistance, he or she can step over to a banking services station and sit side-by-side with an employee. The idea is that sharing a screen with a bank representative will help the customer feel more comfortable, says Kimberly Hval, the bank’s executive vice president and director of channel strategy and support.

Large banks are increasingly focused on integrating mobile and online customer-service tools within the brick-and-mortar banking experience, according to Eva Wolkowitz, a research analyst at the nonprofit Center for Financial Services Innovation.

“The days of a velvet rope and a massive teller line are over,” says Marc DeCastro, research director of customer-centric bank strategies at IDC Financial Insights. “Now, we will see more retail-type settings with pods and automated tellers, video terminals and bank representatives that can handle anything from taking a deposit to helping a customer close on a loan.

Larger banks, too, are feeling the pressure to stay competitive and, in some cases, reinvent themselves to meet customers’ changing preferences. Wells Fargo Bank, with $1.4 trillion in assets and 6,200 branches in 39 states and the District of Columbia, has introduced the “neighborhood bank” to complement its traditional format, primarily in urban areas. There are now three in Washington, D.C., and they are each less than 2,000 square feet. The newest is inside a Safeway supermarket and is just 350 square feet, according to Julie Campbell, vice president of corporate communications for the bank’s Northern and Central California region.

The new stores offer the same technology as Wells Fargo’s traditional branches but devote 90 percent of space to customer access, compared to 60 percent in traditional, larger branches. They also include wireless tablets and phones. Campbell says that while customers are using more technology, face-to-face interaction remains critical to the business model.

“Our [branches] remain central to our strategy of providing excellent service and meeting our customers’ financial needs,” she says. “We’re able to use our space more efficiently with new technology, which allows us to eliminate paper-driven, back-office processes.”

As to whether more smaller stores will be opened, Campbell says the decision will hinge on feedback from customers and team members as they use the new neighborhood format.

These shifts in design and use don’t mean branches are obsolete, at least not according to DeCastro. “The branch is not going away anytime soon, but rather, will continue to evolve into a relationship-building location as opposed to (focusing on) high-numbers of transactions,’’ he says. If banks could start all over, he says, they would likely build smaller branches with more streamlined flows.

In 2013, PNC, with $309 billion in assets and locations in 19 states and the District of Columbia, consolidated approximately 200 branches in response to research showing that customers are increasingly using online, mobile channels and ATMs to conduct the majority of their basic banking needs, Zwiebel says.   

PNC continues to evaluate its branch network to ensure it meets customer demands, she says, and the bank is making further consolidations where necessary. In addition, some traditional branches are being converted to focus on service and technology. “Tellers are being retrained as financial consultants to broaden their knowledge and focus more on in-depth conversations versus transactions,’’ Zwiebel says.

So instead of waiting behind a counter, consultants will greet customers, help them with a transaction via tablet or ATM when possible, answer questions or connect them with a specialist, such as a mortgage banker or investment advisor.

PNC is also testing video conferencing with specialists and touch-screen displays for product demos in some locations. The new strategy is being tested in 45 of its 2,700 branches, with plans for more by the end of 2014. It’s an area ripe for expansion, according to DeCastro, and while some institutions are doing small rollouts, the industry hasn’t fully embraced the technology.

Expect to see personnel changes, too, as banks evolve. “The individuals that will be needed to run a branch based on relationship-building may not necessarily be the same individuals

in the branch today,” DeCastro says. “More highly skilled and compensated employees will be needed on the front lines.”

Of course, not everyone shares that view. Banks like Ally and Simple, based in Portland, Ore., have opted for a completely branchless model.

“We found, in general, that branches are a dying concept,’’ says Krista Berlincourt, communications manager at Simple. “Traffic on the whole is down around 30 percent.”

Most consumers would rather have an easy, efficient banking experience and not have to pay fees, Berlincourt maintains. “Technology is an extension of the human state,” and like the Amazon.com model, consumers are accustomed to being online, pushing a button and having something delivered, she says. “It turns into a big engagement when you go to a bank, when in actuality all you want is to put your funds somewhere secure and access [your account] and manage it and understand it when you need it.’’

Simple offers real-time transaction processing so that every time a consumer swipes his or her card, they receive a notification on their smartphone. Unlike a traditional bank account, Berlincourt adds, Simple provides deep insight into a customer’s spending. With its app and an Android or iOS-based mobile device, consumers can see the vendor’s name, the amount they spent, the category and the exact location of the store.

“Sometimes you can’t remember why you spent money somewhere, so we answer all questions proactively for a customer in a way that’s easy to digest,” Berlincourt  says.

Like many banks, Simple also offers photo-based check deposits, so a consumer can take a picture of a check with his or her smartphone, and it will automatically be routed into a bank account. While traditional banks use mainframe systems, Simple is a cloud-hosted bank that processes transactions in real time to give customers “constant, continuous awareness of their funds,” Berlincourt says.

For its part, Rabobank, which was founded to provide agri-finance expertise with a strong community banking presence, is sticking with its newly modernized branches. “What we’re doing is going through a multi-phase remodel and refresh process of our branches as leases expire [and] we look to see if we need that physical presence,’’ Hval says. “It may be more conducive to moving to a smaller footprint rather than the 1970s-style, giant structure we had.”

In the meantime, “consolidation is not a concern of ours. That’s a big-bank issue,’’ notes Paul Chartrand, chief marketing officer and head of digital strategy at Rabobank. “We are much more about engaging with our communities and understanding our customers, and that creates a niche for us.”


How do you take your banking? Do digital features appeal to you, or do they make you uneasy? 

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