You walk in, greeted not by a person, but radiant digital displays that follow the clean lines of the building. Cutting-edge technology is propped along the desks and walls, and a mix of customers and employees (sometimes difficult to differentiate) mill about the room with little need for conversation. No, you are not in an Apple store — you’re at the bank.
The days when bank customers were greeted by a person in a conservative suit and then sent to wait in line to speak with a teller are quickly fading. Banks are ditching their stuffy interiors and replacing them with modern, Apple store-like features, all in the hopes of providing the banking experience their 21st century customers want. And from the looks of things, that means a lot of screens and little human interaction.
Citi Leads Smart Banking Trend
In 2008, beginning with its Singapore location, the bank began constructing futuristic branch prototypes that swapped tellers for touchscreens, size with efficiency, and gave locations the overall look and feel of Apple stores. It wasn’t a coincidence, either. Rather than reinventing the wheel when it came to modern design, Citi actually hired the services of Eight, Inc., the architectural and strategic design firm behind Apple, according to The Financial Brand.
Tour of the Japan Citi Smart Banking Branch
Citi Smart Banking then came to the United States, with the New York branch offering “six interactive sales walls; image ATMs; free online access and Wi-Fi for customers; 24/7 access from the ATM lobby, to customer service experts via videoconferencing; and a private seating lounge for customers of Citigold, Citi’s premium banking service,” according to BankTech.com.
Unfortunately for financial institutions, comparing the banking and tech industries isn’t apples to oranges, so to speak. Banks might only get so far mimicking Apple before they find they’ve run out of gimmicks that drive revenue.
Is Imitating Apple Really the Way to Go?
The shiny hardware and eye-catching displays might be aesthetically pleasing, but it’s important to understand that Apple’s loyal fan base isn’t retained through design alone. There is also a connection to the customer, with “Geniuses” who can provide one-on-one service and guidance in stores. Simply putting up an Apple-esque facade might not be enough for banks to generate return (i.e., happy) customers.
“As we have seen at a certain large national retailer, dropping concepts that worked at Apple into another category can have disastrous consequences,” said First Tennessee Bank CMO Dan Marks.
However, Marks also pointed out, “I do think banks can be inspired by Apple and other companies who are fanatical about design. Good design starts with the really deep spoken needs of customers and how to delight them with a total approach to the environment. Umpqua is probably the most successful example in our industry in creating a truly unique branded branch design that has been successful in driving revenue and profitability.” Other banks that manage to accomplish this, Marks said, are Frost and First Republic.
But is strong design and branding enough?
Photo credit: matt buchanan
3 Reasons Modern Banks Might Backfire
There are a few potential problems banks could face by moving away from traditional branches and toward modern banks that resemble Apple stores:
1. Bank customers still expect personal service.
One of the main reasons why local banks and credit unions have gained membership in recent years is because of their superior customer service that focuses on the individual. Bank customers might value convenience, but they might also not appreciate the idea that their bank doesn’t have time for them. Modern banks will need to adopt Apple’s customer service approach along with design if they hope to retain and acquire new business.
2. Older generations of customers might be alienated.
It’s obvious banks are trying to appeal to younger generations who possess great technological savvy and almost nonexistent attention spans. But what about their current customers? Generation Y and Millennials might have iPhones surgically attached to their palms, but a recent study by the U.S. Federal Reserve Board found that more than half of mobile phone owners who do not currently use mobile banking say they don’t have any interest in the technology.
It’s apparent that those who haven’t already adopted technology as part of their financial lives probably aren’t going to, ever. That leaves a lot of people who would rather talk to a physical person when visiting the bank.
3. It’s still the bank, and no one wants to go to the bank.
Banking expert, Brett King, nails the underlying problem modern banks face in his e-book “Banking 3.0.”
“Turning banks into coffee shops, yoga studios, media showcases, and Apple Stores just doesn’t bring customers flocking back to interact … Insist on sticking a new-looking space over the same old processes, complexities, culture, metrics and philosophy and you’ll score a big, old FAIL!”
In essence, people don’t want to hang out at the bank, no matter how trendy or modern it appears. Banks will have to provide more value to remain relevant; or as King suggests in his book, eliminate physical branches from the banking experience completely to make customers truly happy.
In fact, King argues that it isn’t even the sleek Apple stores that drive success for Apple! If we look at its revenue sources, half of its sales occur online.
“Customers might start their relationship with Apple in-store, but they don’t have to, [and] increasingly they’re choosing not to,” King explains.
Banks can emulate Apple all they want, but it turns out the brand’s stand-out design is just a fraction of its overall success formula. If banks want to attract younger customers and remain relevant in an increasingly digital age, they might want to stop focusing on the physical branch all together.
Photo credit: Paul Hudson