BBVA USA, known as an award-winning digital technology pioneer, will be adding 15 new branches to its Texas footprint in early 2021 in spite of continuing concerns about physical facilities in a time of lingering COVID-19 worries.
On first consideration, more branches seems an unlikely move for an organization that offers internal training to turn employees into “digital ninjas,” as described in the bank’s own tech blog. And a somewhat paradoxical move, in the midst of a pandemic that is spiking again in Texas, given the bank’s renewed commitment to financial health.
Cody Sparks, BBVA USA Relationship Model Discipline Leader, explains that the expansion has been in planning for a year and half, but that didn’t mean the bank couldn’t have shelved it.
“We definitely took a pause when COVID came,” says Sparks. “Everybody’s been taking a pause with COVID, reconsidering their distribution models.”
“COVID-19 has demonstrated that banks can operate from fewer locations and not lose customers,” says Jean-Pierre Lacroix, CEO of branch designers Shikatani Lacroix Inc. Clients of the firm “are preparing for a disruptive recession,” says Lacroix, by trimming expenses, including branches. For many that was in the cards within, say, five years, but now some are truncating that into a two-year horizon, he adds.
On the other hand, Americans have made it clear, that they still find branches useful for more complex transactions. In addition, adds Lacroix, “branches remain the most important tool for growing market share.”
Sparks says the new branches will help introduce more consumers to BBVA’s digital channels while also facilitating face-to-face meetings with staff to develop financial plans. Cody believes such consultations will be of even stronger interest in the wake of the pandemic lockdown’s impact on the U.S. economy.
In the end, reflecting on the junction of digital and branches and the need for financial planning, Sparks says the bank decided that all the reasons the branches were initially planned were just as valid even after four months of coronavirus. And it’s not as if BBVA USA had suddenly lost any faith in digital. Only a few days before announcing the new branch plans, the bank launched Mobile 9.0, the latest iteration of its mobile app, and enhancements to its online banking services.
Sparks says financial institutions tend to see things from their own perspective, not necessarily the way consumers see them.
“We draw very defined lines,” says Sparks. “This is the branch channel. This is the online channel. This is the mobile channel. This is the contact center channel. I don’t think customers see it that way. They think, ‘I picked up the phone. I picked up my mobile device. I’m on my computer. I’m in a branch.’ They see it all as an opportunity to interact with a financial expert.”
“So,” he says, “we see branches as fully complementary to our digital strategy, and this will not change in a post-pandemic world.”
Smaller Branches Will Focus More on Consultation
From the start the bank’s plan called for smaller branches in the new locations, according to Sparks. In the course of mergers and acquisitions many Texas banking organizations have accumulated a motley collection of branches of all shapes and sizes.
“We’re shooting for 2,400 to 2,500 square feet, which is much smaller than our existing branches,” says Cody. As the issues of coronavirus and the desire to provide space for social separation arose, the bank didn’t add square feet. Instead, it had its architectural consultants push back floorplan walls into back-shop space to provide more distancing in its public areas. Nonpublic space will be sacrificed for COVID safety concerns.
Most of the locations will be situated in retail areas — not malls — that will have their own external entrances. Sparks says the siting of the branches is based on a new strategic footprint model the bank developed.
The standard staff complement will consist of five people: a Branch Manager, a Financial Sales Consultant and three Personal Bankers.
A key element of each new branch will be the Personal Banker Bar, and this will be one of the first things the visitor sees on entering, as shown on the schematic below in the darkest red hexagon. The bar provides space for three personal bankers (essentially universal bankers), who will sit across from seated consumers who have come in for everyday banking transactions such as deposits and withdrawals and for opening basic accounts. (There will be partitions between the stations on the bar.) These bankers can also help them with questions about digital channels and onboard them for those channels. Branches will also provide walkup and drivethrough ATMs.
“They’ll handle transactions just like traditional tellers, as well,” says Sparks. “These are not cashless branches.”
The new branches will emphasize transparency, literally in that there will be many glass walls, and figuratively in that there will be a clear understanding of the types of services and venues that the offices provide.
Near the Personal Banker Bar will be the “Cocoon,” a semi-private space where the branch’s Financial Sales Consultant will work with customers requiring advanced services.
The Branch Manager’s Office will be one of several private offices, but it will be right near the front, so the manager can see clearly all that’s going on. The architects initially placed that officer towards the back, but the bank insisted on the change. “We want the branch manager to have complete command and be completely in touch with what’s going on in the lobby,” Sparks explains. “They’ll be within a few feet of the sales consultant and have a clear view of the banker bar.”
The layout will also include Huddle Rooms. These private “hotel” spaces are intended to allow specialists such as a mortgage banking officer, a licensed investment advisor, or a business banking specialist to travel to the branch to meet with customers by appointment.
Private work spaces out of public view have been included in the branch plans to give bankers time to make calls reaching out to customers.
“We want them to check in with them,” says Sparks. “This became extremely important during COVID. Our customers want the bank to check on them, touching base and offering support.”
This is in keeping with the goal of focusing on customer financial health. So are the locations. Sparks makes the point that six out of the 15 branches will be located in low- to moderate-income areas.
“That was a visible and tangible way that we could demonstrate our dedication to financial health for all sectors of the community,” Sparks says.
Appointments Taken, But No Appointments Necessary
During the pandemic some institutions closed off lobby service completely, while others, including BBVA, allowed for essential lobby service by appointment. Sparks says the plan is for new branches to accommodate walk in traffic but that appointments will be available to those that want them.
“I think customers will probably gravitate towards making appointments. People are doing many more of their transactions digitally and they will probably be more thoughtful about when they come to a branch,” says Sparks. “And while these branches are definitely part of our strategic plan, we have additional plans, related to remote banking. We’ve already taken a first step in that transition. All of our retail bankers are trained on how to originate accounts remotely.”
In addition, Sparks sees a return for remote video banking. A few years back the bank piloted video combined with ATMs, called Banker Link. “I think we were just a little ahead of our time,” says Sparks. “Remote origination, remote contact with video capabilities will become more and more integral to the banking industry.”
Branch Design Expert Vets the BBVA Concept
“They’re pointing in the right direction,” says Jean-Pierre Lacroix of BBVA USA’s overall plan. “BBVA has looked at the future and realized that they have to up their advice function.”
The size they’ve selected, he says, is within the 2,400-2,700 square foot range that has come to be “the new normal for typical branches.” (By comparison, a decade ago the typical branch was around 5,500 square feet.) He credits that trend to the reduction in the number of tellers generally used in a branch as well as the shrinkage of the work rooms included in most floor plans.
Lacroix questions some aspects of the bank’s blueprint, however.
First, he questions whether hands-on branch demos of mobile products will work in the coronavirus environment. He doubts that consumers are going to want to touch a tablet or a phone that someone else has touched. Even though some reports downplay the likelihood of catching COVID-19 from surfaces, Lacroix says many will still be worried, especially older consumers.
Lacroix also questions the concept of sit-down-only teller stations. He believes seated customers won’t move on as quickly as standing customers. Sit-down is more personal, he says, but it could cause backups. “COVID has slowed down branch traffic,” he says, “but it will pick up again.” He recommends a mix of sit-down stations and quick-service standing stations.
Lacroix also thinks more traffic should be pushed to walkup and drive through ATMs and that more of the effort to onboard digital laggards be pushed to a service phone line.
“I would replace the personal banker bar with a lobby concierge who is responsible for managing appointments and aligning customers to the appropriate private banker room,” says Lacroix.
He’d also put more emphasis on video connections with experts rather than requiring them to report to the branch.
“The pandemic has trained all of us to use video communication as our second form of personal engagement and this behavior is not going away,” says Lacroix.