Since April 2006, Union National Community Bank’s Gold Cafés were heralded widely around the financial industry as a fresh innovation in BRANCH DESIGN. The concept was a revolutionary combination: one part bank branch, one part upscale, fully-functioning café. There were espresso drinks, smoothies, menus, patio seating, checking accounts, loans, and even “financial baristas.”

The Financial Brand made some inquiries with UNCB about the status of Gold Cafés after Market Insights Insider ran an article suggesting UNCB’s cafés may be closed. Well, now it’s official. After little more than two years into its Gold Café experiment, the bank has reverted back to a more traditional branch environment.

In an official statement, the bank says, “the focus needed to shift back to community banking from full-service retail coffee operations. The decision was made to eliminate the café service and continue to provide community meeting space.”

The branches will continue to offer free Wi-Fi and 7-day banking. You can still get coffee. Drip. Regular or decaf.

UNCB’s reversal could be construed as a referendum on the branch + café concept, a design approach that had gained some popularity in the first half of the decade. Branch designs from Umpqua Bank and ING Direct seemed to suggest financial institutions could transcend their boring caste by introducing experiences outside the banking world. Everyone wanted to be Starbucks.

The basic, overriding strategy aims to transform branches from banking centers into community hubs by making them warm, casual hangouts. You probably heard the retail maxim, “The longer they linger, the more they buy.”

Reality Check: Most people don’t want to hang out at the bank, no matter how cool it is. No matter how retail you make your branches, no matter how enjoyable the experience, the average consumer will never say, “Let’s go hang out at the bank.”

Shades of trouble with UNCB’s Gold Cafés were starting to show back in 2007, after Mark Gainer, CEO/UNCB, had some time to look back and evaluate the concept’s performance.

“Banking is a very competitive but highly commoditized industry. We believed true differentiation was imperative for our successful growth.” — Michael Frey, President/UNCB

“I think we’re going to take a pause here for a while and grow these before we look into other markets,” he said. “There is a little bit of confusion; Is it a coffee shop or is it a bank?”

This is precisely the problem Jim Bruene, publisher of Netbanker, saw in the concept. “One of the biggest reasons to build branches is for their advertising value — placing the bank’s brand in front of thousands of commuters and errand-runners each day.”

“By calling it the Gold Café, UNCB lost the normal branding value,” Bruene noted.

Union National Community Bank serves residents of Lancaster County, Pennsylvania and maintains assets exceeding $477 million.

Key Takeaways:

• Just because UNCB’s Gold Cafés failed and Chase is throwing out WaMu’s Occasio branches does not mean you can go on building the same old, boring branches — just like you have for the last 20 years.
• Branches are a critical brand-building tool for financial institutions.
• Branding requires relevant differentiation. You need to create a unique experience, but you also need to stay focused on your core purpose: banking (i.e., not coffee).

“Financial Baristas”
Employees served as dual employees of the bank and the coffee operation — as experts on bank products and the preparation of espresso beverages, was the bank getting two jobs for the price of one?

The interior space reflects something far from a traditional bank. The walls are painted in warm colors. Exposed ceilings, exposed brick, concrete floors, a fireplace, sofas, chairs and coffee tables stacked with books.

The bank had a contemporary-looking microsite supporting the cafes (left),
which was in stark contrast to the bank’s overall brand identity (right), as seen in the current website.

Beneficial Bank in Philadelphia, launched an upbeat branding campaign following the election. The campaign carries the theme “Starting Now.” The campaign includes two TV spots, new brochures, branch posters, print and outdoor ads.

Beneficial has $3.5 billion in assets, 72 branches in the Philadelphia region and 250 employees.

“Fiscal Sanity”
A general spot introducing the brand theme. Not every financial institution posts their TV spots to their website — like Beneficial does — but they should.

“Solar Lending”
In this spot, one of two in the campaign, Beneficial is pushing business loans specifically for solar power.

Four branch posters.

Three billboards.

Three brochures in the new series.

Transit ads — a train wrap.

Full-color brand ad.

The new brand look-and-feel has been integrated into the bank’s website.

Agency: LevLane in Philadelphia.

Teller transactions at Erie General Electric FCU’s newest branch will be conducted “at ‘teller pods,’ where members and employees can communicate openly without the barrier of a counter,” according to the CU Times.

Other branch features:

• Two stories
• 18,000 square feet
• Flat screen TVs
• Electronic sign-in pad
• Full children’s play area with video game systems
• Fireplace
• Refreshment station

In an illustration on the credit union’s website, you can see the member lounge featuring a fireplace and large, flat screen TV. A recessed ceiling in the waiting area helps visually define the space, while a protruded ‘soffit‘ helps define the welcome desk.

The branch’s paths are carpeted, while the dwell zones are hardwood. Many financial institutions do the opposite: put hard surfaces in high-traffic areas, partly because they are easier to clean when they get dirty (as they will often).

Because hard surfaces reflect sound, carpet is commonly used to increase audio-absorbency in spaces requiring more privacy. Carpet is also more comfortable to stand on than hard surfaces, which can encourage prolonged engagement in sales and services zones.

With $87 million in assets and 13,000 members, Pittsburgh Teachers Credit Union will officially become ‘Riverset,’ effective January 2, 2008.

According to this article, President and CEO Christine Chojnicki said the credit union’s name was being amended to Riverset in an effort to broaden the organization’s appeal to groups other than teachers. Chojnicki said the name change will make the credit union “more inclusive” of all its members, as well as members or employees of some 60 companies and organizations representing health care, retail, hotel and public sector employees.

She said the credit union isn’t moving toward a community charter or away from its core members, even thought it will be open to anyone who lives on Pittsburgh’s South Side, where the credit union is based.

Chojnicki is quoted as saying, “Our members have been very receptive to the change.”

Michael Wishnow, senior vice president of communications for the Pennsylvania Credit Union Association, said there’s a trend among credit unions to move toward community charters and away from select employee groups, or SEGs.

“When you look at how credit unions grew up, it was usually around a single, large employer,” Wishnow said. “But there are fewer and fewer large employers.”

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