Will Howle loves Apple. The first thing he asks this interviewer is how I like my Apple wireless keyboard for the iPad, as he's planning to order one that weekend. He shares how much he likes the iPhone 4, with its ability to create a secure personal wifi hotspot. "If I'm at an event, and not doing well without a connection on my phone, I can quietly turn on my iPhone, flip on the hotspot and connect via wifi," says Howle, chief operating officer for North America Consumer Banking at Citi, who speaks like the smartphone junkie so many bank executives have become.
Our conversation takes place in Citi's Union Square branch, which was designed by Eight Inc., the designers of Apple stores. "It was a big decision because we had architects with whom we've worked in the past and with whom we felt very comfortable," Howle says. "But we wanted to create something fresh and new and unique to banking. When you tell people that [the branches were designed by one of Apple's design firms], the light bulb goes off in their head, because they've been trying to figure out what this branch feels like, and then it makes sense."
The branch, as you would expect, has a clean, spare look with open space, a central concierge desk, a high-tech lounge area, workstations where customers learn about online banking, and a video conferencing customer service kiosk. The wall-mounted marketing displays that provide product information and the time, data and weather sometimes remind customers of giant iPhones. Free wifi draws in local residents who come in to check e-mail — three twentysomethings are sitting together in the lobby during our visit, silently texting.
Citi is investing millions in new branches and branch refurbishments that provide technology and design upgrades providing a more Apple-like experience for retail customers.
Citi has a multi-year commitment of a couple billion dollars to branch technology and construction. "We haven't invested in our technology in the past, so we're making up for that now," Howle says. The bank is building 21 new branches this year and 200 branches over the next three years, in three modes: small "express" branches, standard or "core" stores, and flagships like the Union Square branch that opened in December.
"It's an odd phenomenon," Howle says. "Years ago, it was predicted banks will become dinosaurs and that brick and mortar is going to go away. But in the markets we're in, especially in metro areas like New York City, there's foot traffic. People want the comfort and security of knowing if they need to get a cashier's check on a Saturday, they can go in and see somebody." All the new branches will have elements of the technology, design and color palette of the flagship. Most will offer free wifi.
One device Citi will use to determine which new technologies to roll out in the branches is a pair of branches — one on the east coast and the other on the west coast — that will serve as labs in which the bank can try out new gadgets, software and designs. Howle is identifying branches with enough, but not too much, traffic.
Citi is identifying 25 branches in which it will deploy special technology, such as digital merchandising and iPad deployments. "We'll visit those branches to make sure the managers are trained on the new online experience and the iPad app," Howle reports.
The bank is also taking its branches paperless. "We don't have those awful brochure racks that go stale because they don't get updated," Howle observes. The digital marketing walls take the place of the old marketing collateral. Imaging software and scanners take care of as many internal documents as possible.
A massive data-management project Citi has been involved in will enable all of the bank's branches around the world to be able to call up real-time information about a customer's global relationship with the bank.
The bank-branch-as-retail-store concept is not new — it has come and gone in waves for years. Washington Mutual rolled out hundreds of Occasio branches in 2000 that were designed by the firm behind Disney stores; these were turned back into traditional branches by JPMorgan Chase when the New York bank took over WaMu in 2009. "They did it, Bank of America did it, First Union did it horribly — I had to help clean up that mess," Howle recalls.
Why have some of these former incarnations of the retail store branch crashed and burned?
"Where banks have failed in the past is they've tried to make it one-dimensional, they tried to force pure technology and didn't take into account customer preferences nor offer the consumer options," thus they alienated a segment of their customer base, he theorizes. "My 19 year-old son will be very comfortable doing video conferencing, no big deal. My mother, on the other hand, wouldn't. She has the option of working with a banker in a traditional way." Citi executives including Vikram Pandit and Howle's boss Cece Stewart have been projecting a message of customer centricity, which includes giving customers choices about how they are served.
One theme evident throughout the Union Square branch design is the herding of customers toward self-service options. Branch staff have the space (9,700 square feet) to show people how to deposit checks at the ATM, so next time the customer comes in, he can go straight to the ATM. Concierge staff work with customers to help them set up and use online banking so in the future, they can head for an online station on their own.
"Six months prior to our opening the branch in December, we conducted a survey with several thousand residents in Union Square," says branch manager and senior vice president Billy Cho. "The main finding was that 72 percent of residents said they would not switch banks unless they had personalized service," he relates. "Technology is fantastic, but if it's a cold atmosphere, I don't think that will be a win for us."
Cho says the branch has received a lot of positive feedback on Yelp, Facebook and other social media sites. "We had a Tweet-up reception and you could tell who was coming in for it because they didn't look at anybody, they were all on their iPhones and knew where to go because they were reading the Tweets. The technology captures a different audience sometimes."
Though he wouldn't divulge specific numbers, the customer retention rates at the Union Square branch have been "phenomenal," Howle says, and the funding rates on accounts are well above other branches. "I wish they all performed like this."
In the bigger picture, Citi is looking to get back into the innovation game. "We want to make sure we're clearly the market leader on new technology and we're excited about it," Howle says.
