Mercator Blog

Taking a Glimpse at New Bank Branch Concepts
Date: December 17, 2013
Research Team
With fewer branches available to service customers and members, financial institutions are assessing their capabilities and figuring out how to do more with less. This includes developing new processes and systems to meld the most relevant characteristics of self-service and full-service channels to manage assets and deposits, which are rising even though there are fewer institutions in most markets.

There have certainly been many novel ideas and changes in banking channels over the past few years. These innovations range from “envelopeless” intelligent deposit/deposit automation ATMs to the growth of mobile banking beginning with SMS/text to mobile Web to downloadable mobile apps to video tellers via remote branches and ATMs, and to new thinking on branch reconfigurations.

Further advancements in banking channels can be seen in FIs of all sizes. A good example of channels innovation can be seen at Bank of America. The bank is in the process of deploying next-generation machines, including some with video capabilities to remote call/contact center personnel. These video-enabled ATMs enable account holders to cash checks and receive exact change, receive cash withdrawals in a variety of denominations ($1, $5, $20, and $100), or speak with a teller located in a call center during extended hours.

Some of the new branch designs include the use of “minibranches” that occupy about 4,000 square feet, much less than the 8,000 to 10,000 square feet typical of traditional branches. Some institutions are also deploying kiosks and tablets to better serve their customers or members. These branches work in conjunction with traditional and flagship branches in select markets, and they offer a wide variety of choices for customers.

As 2013 winds down and strategic plans for 2014 and beyond are being developed and reviewed, FIs should be mindful of the many new and innovative services and processes being introduced to customers and should assess the relevance and applicability of such solutions in specific markets and lines of business.