Branching Out

Vermont Business Magazine, Mar 01, 2004 by Barna, Ed

Like libraries, which are no longer staid places ruled by silence-minded authoritarians, banks are no longer stiff and formal places keeping bankers' hours.

Unlike the early 1990s, which saw retrenchments of branches, the early years of this decade have seen banks reaching out in many directions at once. While bricks-and-mortar branches have seen something of a renewal, after the passing of the fad phase of electronic banking, there has also been room for more drive-throughs, ATMs, Internet services, and expansions of hours at main facilities.

Only partly driven by the sense that there is a larger economic pie to divide, this activity has also been part of a national. movement that for lack of a better term has been called "retail banking." Reaching out to people when and where they need services has become an ethos, backed by plenty of solid market research and demographic analysis.

Even in the creation of new physical locations, the new spirit of banking has taken hold. Partly because of the availability of sophisticated new technology, partly from an awareness of the diversity of clienteles, and partly from the realization that many people are unaware of all the services that deregulation has allowed banks to provide, the design of bank branches has undergone revolutionary changes.

Build It and They Won't Go Away

Perhaps symbolic of the new strategizing is the way the National Bank of Middlebury plans to replace an existing branch office in a local shopping plaza with a stand-alone drop-in plus drivethrough facility. Conscious of the state's need for jobs, they expect the subcontractors to be local, but they have tapped Cincinnati-based DEI, Inc. to help with the interior design.

DEI, a design-build company whose initials stand for "dedication, ethics and innovation," has made its fortune specializing in branches, mainly for credit unions. Therein lies part of the reason for hiring them: especially in an era when some people would rather deal with local names and faces than a national or multinational giant, the credit unions have become a significant source of competition.

At one point a corrtpany-of-the-week on MSNBC, DEI is a very different kind of workplace - as a visiting team from NBM found. Aktion, a software company whose estimation package they use, wrote that "One visit to DEI Inc.'s office and you quickly realize this is a company with a unique - and successful - approach to conducting business. From the employee Think Tank and bistro, to the client touring cruiser VannGoh" they-are "dedicated to creative innovation, proactive thinking, and exceeding the client's expectations."

Employees who offer negative ideas during brainstorming sessions are apt to get pelted with nerf balls. Some of the job titles are reminiscent of the heydays of Ben & Jerry's: executive vice-president Cynthia Grow, for example, prefers "visioneer." One Virginia press report seemed to sum it up, by saying they "take the boring out of banking."

When NBM's new branch opens later this year, clients will find a "first impression person" (as DEI likes to call greeter/receptionists) who can make sure they don't waste time going to the wrong place. There will be a fireplace for chilly weather, coffee in all seasons, a playing and viewing place for children if they have to come along, and a computer where they can learn (with help from customer service representatives if necessary) the ins and out of online banking and bill-paying.

The CSR's will never need to leave a client alone, because paper-work will go to a back room via a pneumatic tube system for immediate processing (a feature that in some areas is seen by banks as protection against robberies).

President Ken Perine said that in combining local builders with DEI's ability to conceptualize a bank's retail identity and design state-of-the-art ways of presenting it to the public, they had found "the best of both worlds."

"We don't do typical cookie-cutter-type facilities," DEI founder and president Richard Grow told the local Business Courier. "Bankers are continuing to turn more toward crossselling and most branches are evolving into retail. facilities."

The same article quoted Fred Johnson, CEO of the Wisconsin-based Credit Union Executives Society: "The competition is so intense, you have to go back to saying that 'the customer is right' is rule number one. So if people come into a lobby, how do we make it a good experience for them?"

Vermont banks large and small have answered that question in different ways, stressing different strengths. But in the interviews that formed the basis for the following account, one guiding principle was mentioned again and again: economic activity is such that there is room for a 'variety of financial services providers.

Small is Beautiful

The trend toward bank mergers in recent years has erased long-known Vermont names and has substituted others that may have been known through their regional or national advertising. As will be seen, there are ways that such consolidations have provided new levels of service to Vermonters; but at the same time, the trend seems to have created an umbrella under which small, independent banks have seen new opportunities for growth.