Analysis: branches – coffee is not for closers
The vanishing branch offices… Could more coffee save them? Richard Buckle, founder and CEO of Pyalla Technologies, muses.
There is no question that for many consumers, cash remains king. Whether you are atop the socioeconomic scale or residing somewhere a lot further down, there are always times when cash can get you out of a jam. But in reality, supporting expensive infrastructure to ensure we have access to our cash anytime, 24×7, is about all many of us know about banks. Yes, their brand is visible across stadiums and on roadside billboards, but seriously, what else can a bank provide these days?
My father once told me that I needed to get to know my bank’s branch manager really well. Of all the people that cross our paths, that local branch manager is perhaps the most important individual – with just the wave of a pen or a couple of keystrokes, impending doom can be quite easily alleviated. Over the course of many years, there were numerous luncheons with my branch bank manager addressing everything from mortgages to line-of-credit to yes, travellers’ cheques, foreign currency and credit cards and even the financing of my many vehicles.
Today, I have my accounts with just one bank even as I have two other accounts with a combination of former savings and loans and credit unions. And I don’t know any of the branch managers of the branch offices I frequent. Then again, while there are exceptions of course, I no longer depend on my relationship with a branch manager for my mortgage, preferring a mortgage broker these days nor have I approached a branch manager for a car loan, preferring to negotiate directly with an auto dealer to get the best packaged “deal!”. As for cash and anything to do with cash transactions (including cheques) such activities have faded from the scene and can no longer be assumed to be an integral part of any future plans for branch offices.
Indeed, in Nordic countries, cash is already on the way out with some industry watchers suggesting that in twenty years’ time, cash will no longer be depended on for any transactions.
Is there a role for branch offices for any financial institution? Does any bank, savings and loan/building society or credit union really need a bricks-and-mortar presence? Once aging baby-boomers leave the scene, literally (and yes, I am a baby boomer so I can say things like that), are the generations following baby-boomers looking to anything on the ground?
If our sons, daughters, nieces and nephews, who are in that 35 to late 40s age group, are ignorant of all that a branch office can provide, accessing their smart phones for anything related to their financial well-being, then can we seriously expect future investments by financial institutions in their branch offices do anything to offset their imminent demise? If robots can flip hamburgers and station themselves behind bars, what value do we place on human contact?
Many years ago, I was visiting Sydney and walked into the Circular Quay branch of the Commonwealth Bank only to find on this harbour side branch, a fully functioning Starbucks. Perhaps they addressed the wrong question, coming up with a solution that was the wrong way around? In other words, branch offices may be better placed in coffee shops as even today, we are seeing more and more branch offices open in supermarkets – my local Safeway’s has a sizeable Wells Fargo branch operation up and running.
At the time of its opening back in 2001, according to one press report, “customers of the Pitt St branch of the Commonwealth Bank in Sydney will soon be able to enjoy a coffee from a new Starbuck’s Coffee outlet being built inside. The Commonwealth Bank has spent much time and money researching a redesign of the ‘look and feel’ of its branch network.”
Visit the site today, however, and there is no evidence of Starbucks whatsoever. What the locals will tell you is that even with all the research undertaken, the bank simply overlooked Sydney Siders’ preference for local cafes and disdained the Starbucks brew. Yet banks continue to experiment with the idea of coffee and banking with Boulder, Colorado, Pearl Street Mall now having a Capital One Café branch that effectively intertwines a Peets Coffee shop with the branch office and where Capital One cardholders get 50% off. Always!
Undeterred by the experience of some banks, retailers continue to toy with leveraging coffee shops. While Polo Ralph Lauren may be closing down select stores it will not be at the expense of expansion of the Coffee Shop from Ralph Lauren. The intent of Ralph Lauren has been to “create a place where people could come together and take a break from their busy days” and yes, to buy new Ralph Lauren merchandise. Including coffee!
As we look at the transitions taking place at the branch office where much of the focus has been on the introduction of new technology, including trials of robotics and artificial intelligence (AI), perhaps the most important consideration might be overlooked. Ralph Lauren wants you to socialise and take a break even as my father advised me to create a sociable and quite personal relationship with the bank’s staff – yes, a place that doesn’t project fear and uncertainty but a reflection on what many of us yearn for. A return to a less hectic, almost village like, lifestyle!
This is an excerpt. The full article is available in the May 2017 edition of Banking Technology.