The pandemic has shifted consumer behavior in many ways, including how we bank. With the increase of online banking and greater openness to digital solutions, it looks as if bank branches are on their way out.
Over 4,400 bank branches were shut down between 2017-2020. And on June 30, 2020, there were 81,586 open branches in the US, a 1,253 drop compared to the same time last year.
HSBC and TD Bank are each planning on closing over 80 branches this year. And U.S. Bank is closing 400 branches.
“We made the decision to close our branches down a few years ago and redirect our investment in people and technology to deliver a better experience to customers. A bank used to be a place you go, now banking is something you do.” said John Blizzard, CEO of Seattle Bank, which got rid of its branches altogether a few years ago.
But while bank branches may be closing, they’re not disappearing — not now, and not after Covid. Instead, they’re evolving, focusing more on complex needs surrounding financial services, rather than just the basics.
“Branches play an important part in serving our customers. We have a diverse mix of branch formats and will continue evaluating and innovating our branch concepts and leveraging key findings to ensure our branch formats meet our customer’s financial needs, particularly as they increasingly use digital channels.” said Julia Tunis Bernard, head of community bank internal and executive communications at Wells Fargo
Gone are the days of the cold, metal bank look, said Scott Spector, principal of Spectorgroup, an architecture and interior design firm that’s worked with over 20 clients in the banking industry during the pandemic. The firm just finished designing Chase’s new branch at 390 Madison Avenue in New York City.
“These marble monuments are going to be much warmer, with much more of a residential touch throughout,” said Spector. “Because that’s how you and I have been living for the last nine months.”
But while the pandemic may not cause branches to disappear, it is leaving its mark in other ways.
“Specific to Covid, in all open branches, we have in place measures to ensure we can serve our customers and keep our branches safe,” said Wells Fargo’s Bernard.
Wells Fargo,which temporarily closed several of its branches in light of the pandemic, has implemented several safety measures. The bank has installed protective barriers throughout its branches, requires regular deep cleaning of open areas, and provides certain services by appointment only. Wells Fargo requires customers and employees to wear masks in branches.
While it seems unlikely all these safety measures will stay on after the pandemic, what will remain a thing, said Spector, is a just-in-case mindset when designing new branches. And that’s not not just in terms of pandemics, but any unexpected event.
“Their thinking is going to be, ‘I need to be designing with such flexibility that in the God-forbid scenario another pandemic occurs, or there’s another situation, and we want people to come into our branches, it needs to be inviting and it needs to be safe,’” said Spector.
In Spector’s words, that means better air conditioning features, better circulation, better spacing, and even conference rooms that double as safe rooms.
Chase, for example, has started including plexiglass at teller lines and desktops as part of its new safety measures. And this is something that it plans to continue incorporating into future designs.
“We will continue to take all of the appropriate safety measures as we continue to update and open new branches across the country.” said John McGinley, head of branch real estate at Chase.
Together with upgraded safety measures, banks are also reestablishing their roles in their customers’ everyday lives.
“You’re going to see these spaces rebranded and re-enlivened with not only more bank branching, if you will, but different types of uses altogether,” said Spector.
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Capital One, for instance, has been incorporating Capital One Cafes into its branch designs since 2018. These spots include seating areas, charging stations, free WiFi, and coffee bars.
These cafes also hold workshops and allow people to book appointments with financial advisors to help manage finances.
“Our Capital One Cafés are intentionally designed to empower people to feel more confident in their relationship with money,” said Elena Limbert, vp of Capital One retail experience, design and construction. “In our Cafes, we are creating refreshing, inviting spaces that evoke and inspire a sense of wellbeing, where everyone is welcome.”
Chase, meanwhile, is continuing to roll out what it calls ‘community center’ branches, places where SMBs, charities, and educators all come together. These branches host local events and include free skill courses.
“Over the last few years, we’ve introduced new branch formats and layouts to meet the changing needs of our millions of customers in communities across the country,” said Chase’s McGinley. “Late last year we announced that we’d be rolling out Community Center branches, a new community-inspired model where we engage with local small businesses, nonprofits and other community organizations to deliver workshops and events to the local residents, like skills trainings and pop up shops.”
Then there’s the way the design of these branches are starting to look. Soon it won’t be that a bank branch will be that metallic looking building with the obvious logo. It will be something that almost blends into the area it’s in, while still emphasizing what it is.
“I think they’re going to have the same standard materials, but a different finish. Within that line, it may be a different fabric, a different carpet, but the branding is going to be the same,” said Spector. “For the most part, it’s how you blend the branding into these things that will be a bit more subtle.”
Chase’s Harlem branch, for example, was designed by a local artist in the area and focuses on serving small businesses in the neighborhood.
“The designs of these branches are unique – in Harlem, for example, we commissioned a local artist, turned the vault into a meeting room and used modular seating that turns a traditional couch into seating for events,” said McGinley. “Many of these have a more open-floor plan that provides enough space for the community to gather, such as for our financial health program called Chase Chats.”
In terms of how the rising use of contactless is affecting the way branches look, there are slight adjustments to the branch designs but not more than that.
Chase, as an example, has so far updated the majority of its ATMs to allow customers to withdraw money without the use of their debit cards through near-field communication technology, as well as added digital tools, so that branch visitors don’t have to wait in line and can do more of their banking through their phone.
“Our digital tools, like QuickDeposit and QuickPay with Zelle, make it easier for customers to deposit checks or send money.” said McGinley.
For the most part, contactless pay’s effects on branch design remains minimal, said Spector. For now, cash and ATMs continue to bring in the most traffic to branches.
So the goal behind bank branches’ new looks and functions is less about bringing more people to the bank, and more about keeping them there.
“The whole ATM piece of the puzzle is the generator of these banking institutions for traffic,” said Spector. “The question is how do you circulate visitors into the main space?”