Bankers harness technology for branch efficiency

The average American consumer is banking far differently than they did even five years ago. Technology, however, hasn't rendered the branch obsolete, and bankers are using the latest developments to complement their physical presence.."Six or seven years ago, the branch was supposed to go away, but now we've realized that people do want somewhere they can sign papers in person with a trust-worthy banker," said Sean Raboin, a partner with HTG Architects, Eden Prairie, Minn. "The buzzword is branch transformation with all the new technology, especially Interactive Teller Machines (ITMs).".Raboin said he expects banks to begin transforming branches using ITM and other technology soon. The industry, however, has not started to do so on a large scale yet..The other trend Raboin identified is a push to open up existing lobbies and make them more inviting. Changes to teller lines − from teller pods to cash recyclers − are helping banks find more space.."I think many people have believed in the past that the introduction of this tech [like cash recyclers] would make things colder in appearance and less customer friendly," said Joe Moorman of Turnkey Associates, L.C., of Waterloo, Iowa. "It's actually the opposite; the machine allows bankers to interact with their customers. The machines count the money properly so personnel can focus on the customer. We're seeing a landslide in bank interest in recyclers because bankers are realizing that.".Changing technology has made consumers less dependent on the branch as their primary banking channel. Increasingly, functions handled by tellers are moving online or becoming automated, and the lobby is changing accordingly. A 2015 Accenture survey on digital banking reports 81 percent of consumers would not change their bank if their primary branch closed. That's a change from 2013, when about 48 percent of respondents said they would switch banks after such a closure.."Technology in general has made banks more global in that sense," Moorman said. "You can still use your hometown bank when you go to college. Tech is changing the footprint and the feel of every bank we talk to. We talk a lot about brand and delivery now.".Those changes aren't necessarily completely eliminating branches. Although retail functions like making deposits and checking account balances have largely moved online, other functions like lending still require a space where relationships can be developed. That means the feel of the lobby often needs to change. In some cases, the changes encourage lingering and cross-selling as well..While branches are slimming down and evolving, having access to a physical presence remains important to many customers and bankers, said Chuck Yagla of Waterloo-based Kirk Gross Company. "In the Midwest, there's still the culture of wanting a physical presence," he said. "Bankers still see it as important to have that physical presence, but maybe in a branch with a smaller footprint.".The average size of branches that Kirk Gross has worked on has decreased in recent years, to 2,500 square feet from closer to 4,000 square feet, Yagla said..For Westside State Bank, which built and opened a new location in Carroll, Iowa, in 2015, a branch in town was a necessary part of its growth strategy. Based in Westside, Iowa, the bank had branches in communities around Carroll, which is the county seat, but no branch in the town itself. "We'd wondered for a long time if we should have a presence in Carroll," said Matt Lujano, president of the $96 million bank. "We already had a large customer presence in Carroll, if not living there, working there and shopping there.".Lujano found an attractive location on the corner of the two busiest streets in town — a former restaurant — and set to work. The 6,000-square-foot building was subdivided, and Westside State Bank rents out a 2,000 square-foot portion for its newest branch. Kirk Gross handled the interior design work on the branch..While the bank already had relationships in town without investing in a physical branch, having a physical presence in town was a part of growing its relationships in Carroll. "Since we opened in June, things have been really good. We opened it to serve our current customer base but we're also happy with the new customers who have come in since," Lujano said. "It's not flashy, just a nice traditional branch.".Some banks are increasing staff and space at their headquarters but are downsizing their branches, said Jack Holmes of Vanman Architects and Builders, Golden Valley, Minn. "Some, for example, are also looking at how they can divide the space to make room for renters while still meeting security and code requirements," he said..Holmes also noted that banks are reorganizing their space to be centered on meeting with customers. When Vanman helped Lake State Bank renovate its branch in Baxter, Minn., it moved the president's office to the front of the bank which gave him a better line of sight into the lobby and increased his ability to interact with customers. The bank also increased the size of its conference room. ."Some banks also are doing more with the sit-down style teller stations," Holmes said. In general, banks are working to improve and put more emphasis on meeting spaces, he said.