On Topic: Branch Banking

Collaboration is key to surviving Future Shock in banking.Futurist Alvin Toffler coined the phrase "Future Shock" to refer to what happens to society when extreme rapid changes take place. Although his famous book by that name was written more than 45 years ago, Toffler was "spot on" with what is happening in banking today..The 2007-08 crash and the emergence of too-big-to-fail financial institutions have produced a world unimagined in the 1980s when I started in bank marketing. Yet, even today many community bankers believe they won't have to change — to which Toffler observed:.• "We must search out totally new ways to anchor ourselves, for all the old roots — religion, nation, community, family, or profession — are now shaking under the hurricane impact of the accelerative thrust. It is no longer resources that limit decisions, it is the decision that makes the resources.".• "The illiterate of the 21st century will not be those who cannot read and write, but those who cannot learn, unlearn and relearn.".• "If you don't have a strategy, you're part of someone else's strategy.".I believe today that a community bank must grow in order to survive and specifically this means growing distribution channels. The problem facing the community bank is they are overwhelmed with the "day to day" problems of regulations and running the bank. I have seen this problem in almost every bank I have worked with over the years. As a result, the task of growth and in particular "branching" has become secondary, due to its complexity. .Any decision on branching requires careful, detailed analysis in an ever-diminishing amount of time. With the cost of a branch today running between $2 million and $3 million, we began with our clients to look for a better way of doing things. Our conclusion was that the functions in creating a successful branch should be approached as a "team effort" to save time and total money. Our team would consist of:.• Bank management;.• A financial site analysis expert who finds the highest producing site;.• An architecture firm that specializes in financial institution design;.• A financial services real estate agent to negotiate the site purchase; and.• A marketing expert for branding and marketing the branch and brand..The advantage of the team approach has been very dramatic and extremely productive. Today the best sites are usually available for a very short period of time. In fact, they might not even be available – so, we work together to make them available. With a team approach we can anticipate and act quickly. The real estate expert has planned out the purchase strategy and price. The architecture team knows all of today's many branch design trends and controls all aspects of the project with the bank's management team as overseer. Meanwhile, the marketing expert has designed the most productive plan to bring the bank to customers and prospects. The team approach to solving distribution and branch planning brings all the critical distribution decisions to a predetermined group of experts. This gives the bank a streamlined methodology to avoid wasted time in decision-making and costly mistakes..My own firm has been involved with other companies to form such teams, which can spring into action when the opportunity arises. Woodland Bank in Grand Rapids, Minn., recently used such a team to open a new branch. "The team gave us the collaborative effort we needed to find the best location in Grand Rapids, build the ideal branch for the site and create an outstanding grand opening and marketing plan to carve out our market share in this geographic area," said Brian Nicklason, the bank's president. .Getting the process right today is critical to a community bank's survival. The amount of correct decisions required by bank management today is "mind boggling" and that's the point Alvin Toffler makes. We believe a process as complex as branching and distribution in banking demands a new way of thinking and we must become "retailers of financial services." The "collaborative" approach is the answer to this challenge today and in the future..Bill Winter is a bank marketing professional who has worked in the Minneapolis-St. Paul area for more than three decades. He can be reached at wdwinter@aol.com