In this episode of the Believe in Banking podcast, Gina and Juliet discuss the resilience and enduring relevance of the of the branch. Fresh off the stage from her keynote at Future Branches, Gina discusses insights from the industry’s changemakers like Chase and what she heard from banking leaders across the country about the challenges they face with their own branch networks. They talk about the importance of renovating and right-sizing existing branch networks, as well as how banks bring their brand to life through digital and physical experiences. Juliet spotlights the latest data that shows the significance of physical branches for younger generations, like Gen Z and Millennials, who still value face-to-face interactions with experts and show that by visiting their local branches weekly. Finally, they both discuss the role of strategy in deploying effective bank marketing and merchandising at the branch and how communications tools like digital signage can make branch communications more meaningful for adapting to customer needs.
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Intro: This is Believe in Banking, a podcast series for decision makers, influencers and leaders, featuring experts taking on the financial industry’s most pressing issues with insight and empathy. The podcast features information and conversations designed to enlighten and empower.
Gina Bleedorn (00:18): Welcome to our Believe in Banking podcast. I am Gina Bleedorn, President and CEO of Adrenaline.
Juliet D’Ambrosio (00:26): And I’m Juliet D’Ambrosio, Chief Experience Officer at Adrenaline.
Gina, I am so interested to have this conversation because you and I have really not had a chance to deeply connect and debrief after Future Branches, a conference in Boston that is by, for, and about the future of branches that Adrenaline is happy to sponsor and support. And actually in which you spoke.
I must admit, I have a little bit of FOMO that I missed out both on your presentation but also on the content in general. So, I’d love to use this time to catch up live about it. And I want to start just by asking about generally what was the vibe? What is the sense from the industry as you are having conversations at the conference?
Gina Bleedorn (01:22): Yeah, well there is a vibe of ‘we need to figure out what to do’ and ‘we’re ready to take action, but we’re not entirely sure how to do it’ on the macro [level]. There are definitely some organizations that are making change in a good way and many shared some of the things they are doing, whether it be ITM deployments or expanding into new markets. But on the whole, there was this great pause post Covid. There has been a resurgence now after we have settled from Covid and the resurgence is both in people wanting physical [interaction].
And this is not just in banking … This is in broader retail in general. They want to go to physical spaces for consultation, for interaction, for advice. But there is reciprocally a resurgence in attention and investment from financial institutions into, ‘Okay, I know I need to change my network, how do I do it?’ And it’s not just about a new branch of the future somewhere. It’s about renovating, reconciling and rightsizing the entire network I already have.
Juliet D’Ambrosio (02:45): And thinking about that idea of it’s not just a branch of the future. What we are seeing – and I think if you had asked us to prognosticate, I don’t know, four or five years ago – the idea that digital experiences would be in the lead and the future of the branch would be a little bit unknown. What we’re actually seeing both from a research side and a data side, but also anecdotally from our clients and [it’s] exactly what you were just talking about, Gina. This idea, I know I need to do something with my branch network. I’m just not sure what is that. It is not digital or physical, but rather it is the combination of both of them, and this idea that consumers are really seeking in-person experiences and continue to do so.
And that is not mutually exclusive with the convenience of logging on to online banking or mobile banking, but it is a recognition that common banking functions are just easier completed face to face. And in fact, 60% of all financial institutions that have a focus on a better customer experience letting our customers complete whatever need they have in a face-to-face way are delivering on this ideal customer experience – that just came out from American Banker. I’d love for you to talk a little bit about what you were hearing at future branches on that idea of how digital experiences are marrying with physical experiences, and why it’s anything but mutually exclusive.
Gina Bleedorn (04:38): One of the most interesting testimonials about that subject was an executive from Chase. And Chase has not previously spoken. Future Branches, by the way, is an event that’s been around since 2017. We’ve been there every year, and it now has two events per year – one in Boston and then one in December in Austin. This was the first time Chase was there. What I loved about it, it was Chase saying the things we have said about Chase as to here’s what you should learn on how to do things right regarding the physical channel. What she said was that people want physical as much as they want digital, and as the transactions go out, consultation comes in. There is especially an opportunity with younger demographics, which seems counterintuitive, but quite literally Gen Z, and Gen Z are at their oldest in their twenties right now down into high schoolers.
Gen Z’s monthly banking interactions are statistically three times more than that Boomers, and that’s followed by Millennials, which are about two times more than that of Boomers. And the reasons why are largely because they do not have associations of the past that a bank branch is where you have to go to deposit your paycheck. They’ve not even ever seen a physical paycheck, but they know that there’s a physical space with experts inside it that could help them figure out what to do with their money and they’re going there or at least they’re trying to go there and that’s why they want physical. It’s why physical branches continue to be a major driver, if not in many cases the major driver, of why people consider doing business with a bank or a credit union.
Juliet D’Ambrosio (06:48): It’s so interesting that you brought up Chase because Jamie Diamond has this – maybe we’re fan girls of Jamie Diamond here at Adrenaline or fan people I should say really – but a quote that he said has really stuck with me and it captures everything that you’re saying, and it is that “People like to visit their money.” And that really taps into two things. First of all, it shines a light on Chase’s seemingly industry trend bucking move into a really significant investment in expansion of their branch network, because it’s driven by this insight that people like to visit their money. They like the idea of a physical space there. And I think even sort of backing up, if we could play armchair psychologists, which is my favorite game, that there is an innate psychological human need to look somebody in the eyes to have an emotional connection to the idea of your money, which is at its core an emotional concept.
This idea of where your future is, your security, your ambition, what you’re building for. So, I think that Chase really became just emblematic of this incredible insight. And that’s true whether you are Gen Z or you are a Boomer or Silent Generation or Gen Alpha, anyone in between. I think it also helps us to understand some of this research that we’re seeing. Almost 70% of customers across all age demographics, all geographies, doesn’t matter where you are, they like branches to be in their neighborhood. They want to see the branch in their neighborhood, and that was report recently from Accenture.
We also know based on what you were just saying, that this idea that Gen Z really looks at the branch through different lenses than their parents or their grandparents did, almost 60% of Gen Z are actually likely to seek financial advice from their bank. That doesn’t mean they’re not also on TikTok following whatever influencer there is, but understanding that they see a very relevant role and you just said they’re three times more likely to actually enter the branch. And this statistic blows me away. It’s from MarketWatch: 13% of Millennials and Gen Z visit their banks branch once a week. That’s not once a quarter, it’s not once a month, it’s weekly. It’s built into their life journey and their rituals, because it has this meaning to them that we can look at and understand what the future of the bank branch might look like by looking at how these younger audiences want to interact.
Gina Bleedorn (09:48): That point you made about TikTok, I think, and I’m sounding a very gentle alarm bell of risk right now, that this in-person trend, especially of young people, represents absolutely major opportunity. It also represents risk. If they come in and they are not getting advice, consultation, engagement, even experience, and given a way to deepen their loyalty, they will go elsewhere. Something else we know about Gen Z and we’ve talked about and recently published a white paper on Gen Z and The Future of Finance, you can find it on our website. They are not loyal. They will leave if there is something better. They are not afraid to look elsewhere. And so if TikTok or a Fintech or the bank or the credit union down the street can give them a better experience, especially in and around advice and consultation, they will leave you for that. So that is a major thing to be wary of.
And I mentioned earlier, but we’ll further elaborate on this major trend now of not just new shiny branches in new places that’s still happening, but also renovation of existing – Chase was one of the first. Now, Chase was more about expansion into new, now they have announced they’re going to renovate 1,700 branches in addition to opening 500 new ones in the next three years. But also on their heels, Bank of America renovating entire network and expanding to new markets. TD Bank renovating hundreds of stores and opening 150 by 2027. PNC investing $1 billion on a hundred new branches and renovating every branch in their network by 2028.
And TD and PNC are both clients of ours. We know they are doing this. They are doubling down, as are many regionals and communities behind them, on reconciling the experiences in the real estate they already have. Now, that also comes with right-sizing, closing, relocating, but there is a major shift that is occurring and if you are not already thinking, not just ‘How do I open a new branch experience?’ but ‘How do I shift the delivery of my physical experience?’ If you’re not already thinking about that, you are behind the eight ball.
Juliet D’Ambrosio (12:44): Yeah, I think we’ve been sort of tracing the evolution of the branch purpose, which can be delivered either through new North Star design, but also as you mentioned through renovation and refreshing in a way that does a couple things. One is thinking about our branches in a way that puts conversation at the forefront of even the visual experience of the space and how do we design the levers to tell a prospect or a customer or a Gen Zer who’s coming into the branches once a week that this is a place for conversation? We know generally transactions are going to continue to decrease or transactions at the branch about 5% per year across a bank’s retail network. And knowing that idea for renovation, for refreshing, as well as thinking about the experiences in a North Star way are so important in order to meet that need.
The other thing that comes to mind, Gina, as you’re talking about this and I’m thinking about how we are engaging with a lot of our clients right now, looking at your branches as a very powerful channel for your marketing through your retail communication strategy, which means that your branches, your branch network, need to be as strategic, as thoughtful and as powerful a marketing channel. They need to be activated in that way, but in a way that is appropriate to a physical environment.
So, as branches become renovated, refreshed, visually even built anew through new experiences, how do we use the branch to then communicate well and orchestrate that customer or member engagement that so that we are speaking to them? We are talking about our institution’s purpose, how we meet their needs, doing the kind of even product marketing in a way that is relevant and in a way that is consistent across branch networks. And as we know, branch networks are highly variable in their form, which is why a strategy is so important to add to that consistency.
Gina Bleedorn (15:19): I am so glad you brought up that point. Talking about retail communications and marketing in the branches is something that I talked about for the first time ever in seven years at Future Branches because the industry needs to hear it. We’ve certainly been talking about it for a while, but it hasn’t been a headline. I think it is a headline now because as you need to make the absolute most of these branch experiences. You need to leverage them. You’ve got really precious opportunities when people come in. You’ve got risk when people come in if they’re not given the right opportunity.
So having the right approach to marketing in them, and it’s largely digitally through digital signage. It is also through staff enablement, which marketing can also support programs that we’ve deployed. The banks and credit unions tell us their staff learns as much about their products and services sometimes as their customers do. That is a key piece of the puzzle. And it’s not that expensive or that difficult, but it’s something so many are not doing right. So, having the right strategic approach to an execution of branch marketing in the physical space, largely digital, but also digital signage, interior and exterior, but also things like activating windows, especially in urban markets or high visibility suburban markets. These are critical pieces to the puzzle of leveraging your branches for growth.
Juliet D’Ambrosio (16:56): I also have found in working with our clients as they consider retail communications as a thing you just said, it’s becoming a headline. It is now recognized as a thing. The recognition that there is a great deal of efficiency actually that can be gained by looking at your retail communications in a 360-degree way, in a holistic way. All of the retail communications that is done in one-off ways actually puts pressure – time pressure takes time, takes money from the marketing team itself. So this is, as banks and credit unions look to become more efficient overall, a clear strategy is a way to help add that efficiency and it just makes people happier. Branch management, regional teams, internal centralized marketing departments feel good about having a clear strategy to deploy their marketing and love to see it working. So it’s a win-win-win all the way around.
Gina Bleedorn (18:08): So, I wanted to even back up and define what we mean when we say retail communications and retail communications strategy. This is a piece of your bigger retail strategy, AKA, your branch strategy, specifically around communicating in an ongoing way largely via marketing. There are also permanent brand elements. There are informational elements, there are educational elements. It is the act of communicating with primarily customers and members, but also even staff in a shadow communication.
And it is a way of deepening engagement and cross-sell, ultimately. The way you do that, however, is not just by yelling product. It is by mixing education, information, entertainment, infotainment into those communications, so that you can then get their attention, get them off their phones and introduce products and services that might be additive to their life. The way you do that is through both digital and static. What we know today as merchandising or graphics or even some people might call it branding or marketing, and that statically can be things like kiosks, like posters, like wall displays, wall graphics digitally.
It is in the form of digital signage, which can be regular 16:9 screens on a wall or can be atypical formats, larger digital walls, soffit tickers or more flagship type of digital displays. There can also be a window element where you are projecting out either on or behind the windows and on or near the drive up. And all of those things together are what are referred to as retail communications. A great example of a recent client of ours that did all of this, right, and they did it with a conversion, it’s our client, Flagstar. NYCB, purchased Flagstar Bank. They rebranded both entities to the Flagstar name, as it had higher brand equity. They later then acquired Signature Bank and they had multiple banks coming together. NYCB even had on its own seven different affiliate banks. So, they were almost like a reborn larger institution.
And we worked on a conversion program of more than 450 locations in that they did retail communications, right – completely decluttered de merchandised, and did a best practice approach of primarily digital signage for marketing, supported by static elements with brand and community localization that now gives them an optimal platform for having the right playlist strategy, the right change out on anything static. But it’s primarily digital, less frequent static change outs to optimally communicate to both customers and prospective customers because there’s an outward facing component. It’s just a great example of now a full network having an ideal platform for retail communications done right.
Juliet D’Ambrosio (21:40): And Gina, even when an institution doesn’t have that blank slate approach that Flagstar had based on their conversion, even without that, the deployment of retail communication strategy can have just as powerful and just as transformative and effect, especially looking at a kit of parts with new eyes. And what we mean by a kit of parts are the vehicles, the static and digital merchandising vehicles in which this messaging sits. Even those renovations and refreshes that happen just in less of sort of a big ripping off the bandaid [way of] all locations all at once, starting from a blank slate, it can have just as powerful effect.
Gina Bleedorn (22:28): Yes, great point. So conversion, wonderful opportunity, if you have M&A or rebrand to start over, if you will, blank slate and do things right. But an example of not going about it that way, but more organically, [instead] is our client BOKF, better known perhaps as Bank of Oklahoma. They have multiple brands throughout the country, 112 branches. They are working with us on a network-wide renovation and refresh program, including a rollout of digital signage and retail communication strategy to their whole 112 network on a three year cycle.
So, we are working on developing a kit of parts. We also have a new North Star experience for those that are new builds and are major renovations and the major renovations are receiving a full new North Star approach, including architectural changes and more interior changes, furniture, lighting, millwork in a more significant way. But the entire network over time is going to get at least some version of the digital communications and retail communication strategy. And those two things are running, in a way, parallel. They’re refreshing, renovating, just like PNC, Chase and Bank of America, and TD have all announced they are doing. But at 112 branch scale and they understand the importance of marketing, so that’s an example of a rolling schedule of renovations, refreshes and retail communications that you deploy over time in a data-driven way.
So you are affecting the areas and markets and locations that are going to give you the best return.
Juliet D’Ambrosio (24:22): I just love nerding out with you on topics, large and small retail communications and strategies and the best way to deploy it included. So, thanks for the conversation.
Gina Bleedorn (24:35): I love nerding out.
Outro: You’ve been listening to Believe in Banking, a podcast series created to empower decision makers, influencers, and industry leaders in financial services. Be sure to also join us on our flagship site believeinbanking.com.