5 Things to Consider When Building a New Bank

People crave convenience today more than ever. Nearly everything on someone's to-do list will be prioritized by how and when it can be accomplished.

The same is true when a customer chooses a bank. What do you think guides their decision? In almost every situation, it's convenience. It's a large part of the decision to choose a brand or branch over another. And, as is the case with to-do lists, a trip to the bank isn't usually a singular task. Instead, it's a single item on a larger to-do list. In order to add convenience to the banking experience, it’s important that the bank be located in a retail area that’s not only convenient for your consumers, but appealing as well.

Prior to putting down a contract on a parcel of land, banks should carefully consider multiple factors, while keeping their target market in mind.

1. Site Selection

A Site Selection Study will help determine the profitability of your individual branches. In addition to assessing your existing branch network, the study will determine where your future branch locations should be located over the next one, three, and five years. There is a high percentage of branches across the country that simply put, are in the wrong places. It hampers their success as well as the overall experience its customers have.

There are three primary strategies used to locate and evaluate sites:

1. Mathematical Modeling.
   The mathematical model changes the phrase “I think this might be a good location" to “statistically, this will be a profitable location". A nine-point proprietary mathematical model is tailored to your specific needs and is used to assess each site in the build project. The model is similar to what Arby's and Walgreens use.
2. Mapping.
   The maps and statistical data include: household density, proximity to retail, competition, traffic volume, future of the site, etc.
3. Community Drive.
   We develop a feel for the area(s) and a sense for where the retail growth is by driving the area. We interview the local city officials, other businesses and citizens. Valuable information is gathered from seeing and listening to what the community is telling us.

The combination of the these three strategies gives you the full story to make confident decisions.

2. Nearby Businesses

Since most banks do the bulk of their business on weekdays, it’s important to be conveniently located to businesses. Your customers plan stops during their lunch breaks or after work, and during those times they're usually on their way to run other errands, grab a coffee or pick up lunch. Proximity to retail businesses can be of huge benefit to a bank, attracting new customers and ensuring satisfaction with the overall experience your branch offers.

3. Co-Branding Opportunities

Look for co-branding opportunities with other suitable businesses. For example, by designing the space to include a coffee shop enhances the customer experience and creates a more relaxed, customer-enhanced atmosphere. This means the coffee shop (or other retail business) share the same entry, lobbies, and waiting area to increase the daily brand awareness for the bank or credit union. 

4. Onsite Customer Experience

For many banks, business is heaviest during lunchtime and toward the end of the day. During these times, lines can become cumbersome or entirely not worth the wait for some people, both in the lobby and at the drive-thru. It’s important that a location be chosen based on drive-thru accessibility. Can cars (trucks) easily maneuver the entrance and exit, even when all of the parking spaces are taken? Is there enough room for multiple drive-thru lines to be provided adjacent to each other? Are there designations for business vs. personal banking?

The same considerations must be given to the lobby.

Consider implementing newer strategies and technologies, like a teller-less lobby and concierge station, to remove barriers that keep customers in the bank longer and allow for bank personnel to up sell additional bank services in a more consultative approach and increase the relationship.

Despite mobile and online banking services reducing customers’ needs to do transactions inside a branch, traffic can still be fairly heavy at certain times. Please remember: studies are now reporting that millennials and Gen Z actually will physically come into the branch to seek out financial guidance in person. Lobbies are evolving from transaction-based to relationship-based. 

5. ATM/ITM Accessibility

Cash is still a necessity in today’s marketplace. When your banking customers need cash, they’re more likely to use the ATM/ITM than to fill out a withdrawal slip and wait in line in lobbies or drive-thrus. Additionally, ATMs/ITMs often provide 24/7 access to funds, as well as allowing customers to deposit checks. Some locations have chosen to dedicate drive-thru lanes to ATMs/ITMs to keep those lines short without the traditional pneumatic tubes and deal drawers.

For this reason, many banks forego the option of a walk-up ATM, even though this eliminates the option of being part of a strip mall or business conglomerate area. Over time as your business needs change, you may find you need to adjust your drive-thru lanes and parking lots as customer needs continue to change. By choosing a parcel or lot that has the flexibility for multiple drive-thru lanes, you’ll give yourself the ability to shift traffic as needed.

Choosing the right site is challenging. Hire a consultant that specializes in site selection for financial institutions. A realtor knows what property is available, but they do not know what property will be a good site for years to come for a bank or credit union. A good location is convenient to local customers, as well as being easy to access even during the busiest times of the day.