Home at the Bank

Northwestern Financial Review, Apr 15-Apr 30, 2004 by Telschow, Tony

How the coffee-shop culture and personal technology are shaping the banking experience

It sounds like a trip to a friend's house. The television is tuned to your favorite news channel, there's a fire in the fireplace, the coffee is fresh and the cookies are warm. Someone is there to greet you at the door and then visit with you the whole time you're in ... the bank.

Yes, the bank. In a thoroughly contemporary combination of home-style charm and high technology, several community banks are moving toward more comfortable, less formal interiors that feature personal-technology favorites such as flat-screen televisions and computers with web access. Add in enhanced personal service, the scents of gourmet coffee or fresh-baked food, and you have the hallmarks of an enjoyable new banking experience.

Beyond the community coffeepot

There's nothing like the smell of money - except perhaps the smell of freshly ground coffee or baking cakes, and bankers are betting that a combination of dollars and scents will be a hit with customers.

Several new facilities are incorporating on-premises kitchens or coffee bars, going beyond the push-pots of coffee and store-bought baked goods that have long been on offer in bank lobbies; they're trying to capitalize on the atmospheric advantages of gourmet aromas.

When Decorah Bank and Trust Co., opens its new facility in Decorah, Iowa, next year, the two-story building will feature a main-floor kitchen specifically designed to send the savory scent of fresh-baked goods into the bank.

"We plan to hire someone from the community who loves to bake, and we'll keep the kitchen door open so the good smells go throughout the bank," said Joe Grimstad, Decorah Bank and Trust Co.'s vice president and project manager for the new construction.

The complimentary cookies and cakes are to be served on the bank's new self-serve coffee bar situated near a double sided stone fireplace. The bank's architect, Waterloo, Iowa-based Kirk Gross Company, said the fireplace anchors a comfortable area for socializing.

"Everyone's so busy, sometimes the only time for conversation is when you have to wait," said Robert Buckley, president of Kirk Gross Company. He also noted that the kitchen and fireplace in the new Decorah Bank and Trust Co., building are consistent with a trend toward warmer, more homey bank environments.

While many banks are upgrading their coffee services, some are going so far as to add actual coffee shops. Security State Bank, a new 20,000-square-foot facility in Howard Lake, Minn., features a 1,500-square-foot retail coffee shop, as well as a small medical clinic. This miniature lifestyle center is a hub of community activity that draws customers even on days when they have no specific business at the bank.

Minnesota-based HTG Architects built the facility. The company's executive vice president Jeff Pflipsen said that by offering amenities other than banking, the bank bolstered its importance as a community resource and increased its opportunities to market to customers, who visit the site more often. The bank also opened a revenue stream by leasing retail space to the Steaming Bean coffee shop, Pflipsen said.

The various service offerings at security State Bank were added to drive traffic by focusing on customer convenience. For instance, bank customers who might not ordinarily have enough time before work or over the lunch hour to run errands, do their banking and get a sandwich or cup of coffee, can save travel time and take care of a couple of these things at the Security State Bank site.

"It saves customers additional trips, because the coffee shop and clinic are right there," Pflipsen said.

The experience economy

In 1998, Harvard Business Review published an article positing that the next realm of competition among sellers of commodity goods and services would be in the staging of experiences that thrill customers. Banks appear to be keeping pace with this shift toward the experience economy and are increasingly attentive to how they use staff members, fixtures and products to create unique and pleasing experiences for customers.

Several architects said that more of their bank clients are implementing a "tour guide" service model, in which a single customer-service specialist greets and then guides a customer through the entire banking experience. Unlike the traditional greeter, the service rep is not a traffic director, but rather is trained to handle any transaction a customer requests.

"This changes things from a visual standpoint, because we have to make the area [where this specialist works] a focal point," said Steph Weiand, cofounder of TurnKey Associates, L.C., also based in Waterloo.

In some cases this service model changes how the traditional teller line is used. For instance, a service specialist could handle deposits or other teller-based transactions from virtually anyplace in the bank, by using stations equipped with pneumatic tube systems similar to those found in drive-up banking, said Tom Lombarde, vice president of HBE Financial Facilities of St. Louis, Mo.