Exterior front entrance of a banking facility

Almost every institution that we took for granted as “stable” is being turned on its head due to the economic, political and societal disruptions caused by COVID-19.

As far back as 2017, a study by the American Bankers Association showed that two-thirds of Americans used online and mobile banking, which means the foundation of the brick and mortar template has been cracking for some time.

This reality, combined with the harder-than-ever-to-swallow costs of construction and maintenance, has some bank presidents wondering if physical branches should go the way of the abacus. Online-only “challenger” banks are doing it, after all.

Yet despite this grand shift in thought, physical bank branches remain a crucial pillar of our society, and the best banks are built in locations that exceed customer expectations - without sacrificing long term profits.

Consider these factors when deciding where to break ground on your new branch. 

Know Your Trade Area

Zoom out into a bird’s eye view of your market, and you’ll quickly get a sense of the geographic challenges that your new branch will face.

Your trade area is your playing field. It determines the approximate performance that you can expect from your branch relative to population density, demographics and your (inferior) competition.

For example: In a fast-paced, concrete jungle like New York City or Chicago, your trade area might only be four or five blocks of dense action.

However, the surrounding suburban and rural neighborhoods might call for a different metric to measure your trade area, most likely in terms of “minutes away.”

Once you’ve established some broad-stroke perspective, you can zoom in and start cracking the codes of consumer behavior that occur within your chosen trade area.


Use Big Data to Determine the Most Profitable Site

Depending on where you are on the curve, market trends can be a blessing or a curse. A bank that takes a risk on a new physical branch must not only be aware of the demands of their market, but also where that specific market fits into the economic cycle.

To eliminate the need for any guess work or thinking caps, commission a site study that will set your project on the right path. This process goes deep, using mathematical modeling, psychometric statistics and historical data to determine the optimal growth analysis of your branch’s site.

These days, hard corner, free standing locations tend to perform 20-30% better than branches positioned inside existing stores, such as an airport or supermarket.

And if you can manage to have your site be the first branch in town, expect a long line of the customers eager to trust you with their cash.


Consider Where You Can Build to the Expectations of the Customer

Our conditioning to the silicon valley aesthetic has spilled over into the physical world.

Nowadays we expect every aspect of our lives to be just as intuitive and slick as our mobile devices, and the banks putting in the work to cater to consumer preferences are the ones that will see the most success.

If your goal is to design a bank that customers actually want to visit, self-service kiosks are a requirement. These private (and socially distanced) stations allow the customer to complete just about any transaction that they would with a live teller.

Some forward-thinking banks have even gone two steps further and opened cafe-style branches, where the ability to bank is viewed almost as a side dish on their gourmet menu.

Think back to five years ago; who would have thought that you could open a Roth IRA and sip a latte in the same place?


Assess Where You Can Win the Hearts & Minds of the Community

The money stored in your bank is more than just pieces of linen. This money could represent someone’s desire for a comfortable retirement or the promise of a quality education.

The branch you build will shape the lives of tens of thousands of people in that community, so it’s best to put in the work necessary to be a good neighbor.

The average consumer has access to more information than ever before, which means opinions are fast and cheap. It’s also no secret that local politicians have used their status and influence to impede the development of new businesses for partisan reasons.

Something as simple as having empathy for your customers' hopes and desires will go a long way towards developing lasting relationships

The key takeaway here is that if you don’t think you’ll be able to win over the community, your location choice is probably wrong.

Partner With the Right Architectural Firm

There are over 20,000 architecture firms in the US, but only a small segment are knowledgeable enough to carry your bank branch project from the blueprint to the ribbon-cutting.

A general internet search is a great first step, but don’t expect any home runs without first narrowing your queries. Be as specific as possible. Just because an architect has built a multi-unit apartment complex does not mean they understand the nuance and specifics of financial industry architecture and building design.

The right firm should have a documented, verifiable history of successful builds listed clearly on their website. You can even go the distance and call or visit the completed builds to make sure they’re up to your standards.

This is a tenet of social proof that’s impossible to fake.

A Little Imagination Goes a Long Way

The potential of a physical bank branch to transcend its historic purpose has never been greater, and we at HTG are eager to help you achieve your project’s full potential. 

Contact us today and schedule a consultation with one of our experts; we’ll give you the level of clarity you need to feel confident when you break ground.

Bank design begins with your vision. Get Your Workbook


Published on June 15, 2021

Topics: Bank Design, Financial Architecture, Building a Bank

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