There are few topics as easy to get into a friendly, if a bit heated, debate these days as "the future of branches" in banking. Many folks quickly compare branches to buggy whip factories and traditional bankers to Luddites. Others jump in and cite research or survey results that say customers still prefer to open accounts in branches, and that, by the way, branches are still profitable.
Still others argue that customers currently open most accounts in branches primarily out of habit and because banks still make it difficult to open accounts online. But that's not the makings of a viable long-term strategy.
Over the past year, few analogies have resonated more with the banker groups that I speak to than the struggles of Barnes and Noble and Borders book stores. A few years back, their physical footprint gave them significant competitive advantages in their industry.
That large network strategy worked great... until it didn't. Technology changed how customers preferred to purchase their existing products (online shopping) and then began changing the very products themselves (eBooks). And the reversal of fortune happened faster than most predicted.
Today, the survival of one of the companies is in doubt, and both seem to be betting their future on eBooks and eBook readers — that actually decrease the need to ever visit one of their remaining stores.
My point to bankers is not necessarily that branches are destined for the same fate as the Big B's — Borders, Barnes and Noble, and Blockbuster stores. But I'd suggest that we are in denial if we pretend that our industry is somehow immune from the tectonic shifts technology continues to create.
The fact that fewer and fewer customers each year prefer to transact in a bank branch is well documented. I remind bankers that this has little to do with the quality of service they get in branches. By and large, it's better than it was a decade ago.
Our branches look nicer, our hours are longer, and our service tends to be better. And yet, transactions will continue to migrate away from branches. That's simply our reality.
More ominous, however, is that fewer folks each year look to a branch to even "shop" for bank products. Consumers increasingly prefer shopping and making their purchase decisions for everything from music to shoes to homes to banking services online. Our branch bankers are more and more being cut out of decision-influencing conversations altogether.
While discussing that topic with a retail bank executive friend recently, he stated that he agreed that the banking industry will look starkly different in 10 years, but he has a business to run today.
If he were working from a blank sheet, the bank he would build today wouldn't look the same. But he doesn't have a blank sheet. He has an existing network, existing systems, a large employee base, and gratefully, a customer base to service. His challenge is getting the most production possible from the branches and people he has in the present.
In our conversation, we agreed that empowering his teams to creatively increase branch awareness and "visits" would be worth exploring.
I shared with him an observation that I recently made close to my home. Not far from our neighborhood is a McDonalds. Directly across the street from it is a branch of a "too-big-to-fail" bank.
The McDonalds is constantly updating the marketing around its building. Conversely, if that bank branch blended in any more with its environs, forest animals would use it for camouflage.
The McDonalds promotes a different "family night" event once each week. And this is a place with huge foot traffic already. The bank branch... well, never seems to do much of anything.
We laughingly agreed that while we may not look to begin hosting children's birthday parties in our branches, our awareness and traffic-generating efforts can stand a little stepping up. If our bankers are truly to be our differentiators, we're asleep at the wheel if we don't continually find ways to increase their contact with existing and potential customers.
We also agreed that his branch teams should take the lead in getting themselves and their branches noticed. He laughed when I asked him when was the last time any of his branch parking lots saw a banner or balloons or streamers or an $80 Wal-mart gazebo or even a barbecue pit.
Sure, corporate marketing may play a large role and provide support. But when branch folks take ownership, as opposed to waiting on "corporate marketing" to drive traffic, things get done.
As our industry becomes more commoditized and technology-driven, old-school "open houses" and "meet-and-greet" events help us leverage our physical locations and our most valuable assets, our bankers.
What are your teams doing this month to put their branches and themselves on customers' radar screens?
Dave Martin is an executive vice president and chief training consultant at NCBS, a SunTrust Banks Inc. subsidiary that offers consulting, training, design and construction services for retail banking programs. He can be reached at
