Even before the pandemic, bank customers had increasingly migrated toward online and mobile banking products to conduct simple banking functions. The widespread temporary closure of bank lobbies in 2020, which linger in some areas today, has called into question the relevance of the brick-and-mortar branch, especially after banks successfully migrated much of their workforce to remote home offices. As the industry ponders its “new normal,” BankBeat reached out to bank architects around the Midwest to get their input. Here, Sean Raboin, partner at HTG Architects in Eden Prairie, Minn., gives his thoughts on how the last year might influence a bank’s use of space.
Q. Prior to the era of social distancing, we saw a move toward open office designs and collaborative workspaces. What is the future for this open-concept design in banking?
Sean Raboin: I think the open concept will still be here. It might be tweaked a bit. We adapted how we conducted business for safety. Lobby traffic is going to decrease because a transaction can happen anywhere. People are more guarded right now, but I don’t think we’re completely finished with collaborative spaces. People enjoy seeing other people. And in many towns, going to the bank is an event.
At the same time, transactions cost money. Banks cannot afford to have staff designated for one or two functions at the bank. We are seeing smaller branches that have three to five people in them and these people are empowered to do all things, open accounts, complete a transaction or process a loan application.
Q. We used to take infrastructure for granted, but we saw weather-related rolling blackouts disrupting life for a large swath of the country. What sort of contingency planning goes into your designs to help bankers ensure continued operations in the face of crises?
Sean Raboin: Some communities don’t have reliable power; they lose power two to three times a month when there are storms because the power lines are above ground. Generators are less expensive than they were, but it’s pretty costly during crisis times to get one, if you can get your hands on one. It’s a pretty big cost to have a generator run the entire branch.
Q. Are there unique strategies you see that are helping draw people back into banks?
Sean Raboin: Co-branding is still the driving force to get people back to financial institutions as technology drives transactions. A coffee shop brings people to the bank. When you have those services, you have a huge opportunity to cross-sell. It can be insurance, a Verizon store, a Subway, a KwikTrip … co-branding is a driving force. And how you design the space is what makes it successful. People should have to walk into your branch to get the service.
Because of co-branding, Heritage Bank in Northfield, Minn., saw good traffic throughout the pandemic. (See related story on page 32.) Hometown Bank in Waconia, Minn., couldn’t wait to reopen its lobby, that’s how profitable and busy they are because of its Mocha Monkey coffee.
Q. What’s it been like having to take public health into account as you embark on a new design? How are you learning new technologies and adapting your approach?
Sean Raboin: I know some cleaning materials, the wipes can strip or dull a material’s finish. We generally use laminate and quartz surfaces and paint, all pretty durable surfaces. We do not use germ collecting materials such as cork or particle board. We don’t do wall coverings anymore. We’ve added plexiglass dividers to spaces, but we’ll pull them away once people start getting more comfortable in the [face-to-face] setting. We ask about air filtration when we meet with clients, if they think it’s important to add to their system.
Bankers want to be prepared for the next pandemic. People are more cognizant of spacing. We used to put people more closely together.
Q. What trends do you see unfolding in bank architecture in the next 12-24 months?
Sean Raboin: Sustainability is important. Solar panels have become more affordable. We talk about EV plug-ins because that attracts a certain demographic. LEED certification was big in the mid-2000s but has dropped off, mostly because we’ve [and others] have adopted many of the LEED standards as standard practice. So you can promote the bank as a sustainable building with LED lights, dimming systems, energy efficient windows without the cost of certification. It’s good marketing.
We see a trend toward purchasing existing buildings and revitalizing them, or moving into dense neighborhoods. Of course it all depends on the culture of the bank.
Lately, we’ve had many more locations going up without a drive-up feature. That has changed as bankers realize they need to have a drive-thru.
Q. There’s a narrative circulating that the branch is dying. What advice can you give bankers who are on the fence about remaking or updating a branch?
Sean Raboin: We aren’t doing any massive 30,000-square-foot branches built for 30 people. We aren’t even building 5,000- to 8,000-square-foot spaces any longer. But as far as branch relevance, I think if [a bank] is out of sight it is out of mind. You still need signage and brand awareness. Those are important. So is providing service with convenience. The psychographics of the consumer are important. If people have to wait 15 minutes to turn left into your parking lot, that’s a consideration. If you talk to community bankers, they would rather have four, 2,000-square-foot branches rather than one large branch. To grow you have to expand that footprint. And the drive-up is still king.
Q. How has the last year been for your firm?
Sean Raboin: We still had a lot of clients who stayed true to their plan, similar to 2008-09. You have to stay ahead of it and be prepared to serve clients when we get back to good times. We had only two clients who stopped everything. We’ve still done a lot of work, more remodelings than anything.