The bank of the future features coffee bars but no teller windows
CHICAGO — The branch bank of the future is coming, and your friendly neighborhood teller may be history.
With transactions migrating online, customer traffic down and once-bustling branches closing their doors, major banks including Fifth Third, Chase and Capital One are racing to create cozier, millennial-friendly spaces offering financial advice, technical support and in some cases, bank cappuccino.
Say goodbye to pens on chains and even teller windows, as banks shrink their retail footprint and shift their focus away from once-essential functions such as cashing checks and taking deposits.
“The teller line will disappear over the next few years and all transactions will become selfserve,” said Kevin Steele, a senior retail banking consultant with Kronos, a leading workforce management company.
The financial technology revolution has taken a toll on the traditional banking model, with upstart online competitors and digital transactions turning many branches into veritable museums. Banks have shed more than 10,000 branches across the U.S. over the past decade.
Creating a smaller, more relevant bricks-and-mortar experience is an imperative for many banks, which are looking to cut real estate and staffing costs, while maintaining a physical presence to give an increasingly digital-first customer base a reason to visit.
The number of bank locations in the U.S. peaked at 99,550 during 2009 — the end of the Great Recession — and have declined annually to 88,070 branches last year, according to data from the Federal Deposit Insurance Corp.
“We don’t need as many banks or branches as banking becomes more digital,” said Pradip Patiath, a senior partner and banking consultant at McKinsey & Co. in Chicago.
But maintaining a physical presence still matters, because studies show a nearby branch still plays into the decision of which bank new customers choose, whether they visit regularly or not.
Chase launched its “digital first” prototype in Chicago on North Clybourn Avenue last year. Amenities at the 3,900 squarefoot branch include video conferencing to connect customers to offsite Chase financial specialists, casual meeting areas and a digital advice bar.
There are no teller windows or traditional transactions, but banking associates are on hand to help customers cash a check at the branch’s ATM, or make a deposit on their smartphone. Customers also can get help with financial planning, home lending and other banking products.
Like other banks, the new model reflects a fundamental shift at Chase, where more than 80 percent of transactions are done by digital channels-mobile, online or at the ATM.
“Branches are still very important to our business,” Chase spokesman Brian Hanover said. “We’re seeing fewer visits, but people still want to know they can rely on having a local branch they can go to and interact with a live person. How that interaction happens, that’s what is exciting and evolving.”
Patiath said there’s a lot of innovation and experimentation going on, but the evolution of the bank branch is still a work in progress.
“I don’t think it’s clear yet, of the various archetypes people are playing with, which ones will be the winning model,” Patiath said. “What is certain is that the current size, format and model of the branch is history.”
Typical Fifth Third branches are 4,200 square feet. The Willis Tower branch in Chicago is about 2,500 square feet. There’s a technology table with a bigscreen TV for demonstrations, private meeting rooms for more sensitive financial discussions and a transaction bar with a robot-like machine behind the counter that can cash a checkwith the help of a banker.
There is still an old school safe in the back as well.
Carmichael said Fifth Third’s next-generation prototype is expected to roll out across the bank’s 10-state portfolio in the months and years ahead. Fifth Third is opening 125 new banking centers in the Southeast that will use the model, he said.
And in the suburbs, customers can forget about a toll plazalike array of drive-thru lanes, as branches scale back the predigital form of mobile banking, Carmichael said.
Staffing will also be reduced inside as “universal banking associates” handle everything from car loans to cashing a check.
Patty Lindstrom, manager of the existing Fifth Third Bank at Willis Tower, is preparing to help customers navigate their way through the new space, where those used to lining up at teller windows with checks and deposit slips in hand may soon face an electronic banking culture shock.
“Most of the transactions that people are waiting in line for can actually be done either by a mobile deposit or at the ATM,” Lindstrom said. “It just takes a little education and you know, hold their hands.”