It’s no secret… big banks don’t have the best reputation when it comes to caring about local communities. They are better known for charging lots of fees and being less personal than local banking providers. Community banks and credit unions, on the other hand, are perceived as being friendlier — both in person, and on the pocketbook — and they are typically more engaged in the communities they serve.
There is an increasing pressure on larger national banks to provide a more personalized service experience, not only in the range of products or services, but more importantly by reflecting the values of customers through their interactions. Creating a strong sense of place that reflects the identity and personality of the neighborhood a branch serves can create a strong platform to deliver a more intimate and relevant experience.
But financial institutions of all sizes struggle determining to what extent they can and should “localize” their approach to retail banking. At the heart of this challenge are questions surrounding scale and operational efficiencies — yes, every branch can have a hyper-local focus that reflects the needs and dynamics of each individual community, but that doesn’t mean it’s a practical idea.
Here are five factors financial institutions need to consider when evaluating how to leverage that sense of “community” in their branch network.
1. The Community Has a Strong Identity
Every community has its own unique traits that are affected by a multitude of different influences. When a financial institution is considering a community-oriented strategy, they should first determine whether a particular community they want to target has a well-defined personality and sense of identity. Here are some guidelines to help make that assessment:
Strong branding and high name awareness. Communities that have placed a greater emphasis on branding tend to have a stronger sense of place and community. Making an investment in defining what unites the area is a clear indication of a strong sense of place and community. In this case, identifying the community name as part of the branch exterior signing should be considered.
Cultural heritage and landmarks. Financial institutions may be able to leverage some of the more well-known geographical and historical nuances of the community within their branch designs — e.g., cultural artifacts, the home of a famous historical figure, or major natural landmarks like rivers or mountains. TD Bank has created a community wall for its branches that are supported with digital display, allowing them to reinforce aspects of historical significance from around each branch. This allows the bank to cost-effectively reflect the values of each community, while also maintaining consistency in delivery, logistics and execution.
Town center or central gathering place for major events. This urban planning feature tends to be another indicator the community has a strong sense of place that could be leveraged by the financial institution. Key centralized events can be cost-effectively shared by numerous branch locations within the area.
2. Fierce Local Competition Among Community Institutions
Each market has varying degrees of national, regional and local competition. As financial institutions review their growth strategy and areas where they want to drive greater market share, they need to understand the unique competitive landscape. In markets where there is a significant presence of credit unions and community banks, you will probably need to consider taking a more localized (or at least regionalized) approach. Promoting local staff, corporate social responsibility initiatives targeting specific communities, and support for local businesses should form part of any “local/community” communications strategy — all of which can be highlighted in branches.
3. Urban vs. Suburban or Rural
Population growth is occurring in urban settings, bringing a rejuvenated and more vibrant sense of community to downtown neighborhoods. With the gentrification of major urban centers, financial institutions will need to consider establishing neighborhood strategies that reflect the needs of people living there more so than its physical surroundings. Ask how your branches can provide additional services and resources that local residents will appreciate. For instance, you could create a “What’s Happening” display that highlights nearby theatrical performances. When you really understand the local area, it allows you to get really creative and specific with the types of services that can bring local relevancy to your retail presence and create a stronger sense of place in the community.
4. Strong Local Story to Share
Knowledge has been shared over the centuries through story-telling, and crafting a storyline as it relates to the local community can be a useful strategy when creating your institution’s sense of place. Stories can be woven into interior signage and decor, capturing the history of the given branch, some interesting facts about employees and their contribution to the neighborhood. The question financial institutions need to ask is, “What untold interesting story do we have that is not already being shared and would bring value to both the community and the branch?” Remember, differentiation is the key to success in branding, so you don’t want to tell the same “local” story that everyone else in the community is telling.
5. A Focus on Smart Branches
The largest investment in retail banking today is in technology. Many of these technologies were intended to reduce transaction costs while providing greater convenience for those consumers who may not need- or want to speak to a teller. However, an over-reliance on technology may have created a gap in the experience — the emotional connection customers want.
I have witnessed first hand the impact that replacing staff with technology can have. Customers become upset when the live human being they expected to see has been substituted with circuit boards and computer screens. That person may have been the very reason they visited the branch in person.
You can re-humanize the branch experience by creating a sense of place, using environmental branding elements that leverage a sense of community. With the age-old barriers to switching rapidly evaporating, ensuring long term with customers can only be achieved by cultivating and maintaining a strong emotional connection them. That’s why it’s a smart strategy to tie your branches to the local communities they serve.