Do bank branches just need a makeover?

North Shore Credit Union, Vancouver The North Shore Credit Union branch has soft music and lighting

After being met by a concierge as you step through the door, you can help yourself to a cappuccino and a hot towel, and dispatch the children to the Kids' Zone while you relax by the granite rock garden fountain.

Welcome not to a high-end hotel, but to the Financial Spa. It is, in fact, a branch of the North Shore Credit Union in Vancouver, Canada.

There are displays of local artists' work and among the aromatherapy candles, you can discuss loans and insurance in what the credit union describes as a "cosy, semi-private lounge" with soft music playing in the background.

It is all a far cry from the stereotype of a branch of a UK bank, with its long queues, poorly staffed counters and freezing cold draughts from the overused entrance.

Is this boutique, sofa-clad destination modelled in Vancouver the bank branch of the future?

Or, as the Co-op pulls out of a deal to buy more than 600 branches from Lloyds, is there any point in banks having a shop-front at all?

The UK's major banks, running a £9bn current-account market, have a branch network numbering about 10,000.

UK branch network

  • There are about 10,000 branches of the major UK banks across the country
  • Households have a total of £693bn in current and deposit accounts with all banks
  • Deposits of £176bn are held with mutuals, made up of Co-op and the building societies
  • Household deposits are growing at about 6% a year

Source: British Bankers' Association

They appear to have changed little over the years, with a line of counters and a deposit and withdrawal machine tucked into the wall.

New entrants to the UK market have tried to jazz up the look of branches, convinced they remain key to the demands of customers.

For example, Metro Bank is selling itself with a branch network that is open every day except Easter Monday, New Year's Day and Christmas Day, and the doors are not locked until late.

The branding even goes so far as to call their premises "stores", not branches.

"Through our stores we are able to provide traditional banking services and build personal relationships, and as a community bank our ethos is entirely focused on offering amazing customer service," says chief executive Craig Donaldson.

Online v branch

In Vancouver, they are targeting better-off members of the community. Chris Catliff, chief executive of the North Shore Credit Union, says that while their deposits have grown since the Financial Spa makeover, the membership numbers have stalled.

Video ATM Video cash machines are being introduced by the Bank of America

These affluent customers are likely to be using their laptops, tablet computers and mobile phones for their banking needs too.

Mr Catliff sees the future of retail financial services as one of "bricks and clicks" - with online banking just as important as a branch network.

"Increasingly, banking will no longer be about where you go, but what you do online. As a result, branch investment will decline over time. Having a strong, emotional, physical brand is a leg up for online branding," he says.

The bank branch of the future may see the digital world come into the branches, rather than replace them.

The Bank of America recently announced plans to introduce video cash machines at branches in Boston, followed by the rest of the US later in the year.

Start Quote

It is time to question why we have bank branches at all”

End Quote Peter Hahn Cass Business School

The machine will include a screen so customers can talk to a member of staff by video link. In effect, it will be a conference call to a call centre, and will be available later in the day, when counter staff have gone home.

Technology such as this may dilute the importance of face-to-face banking and, according to banking expert Peter Hahn, of Cass Business School, remove the need for traditional branches altogether.

"First the telephone and now the internet allows us to pay our bills and choose our investments from almost anywhere. There can be no doubt that face-to-face contact at the bank branch has been in steep decline for ages," he says.

"It is time to question why we have bank branches at all. Sceptics might say that banks want to keep us coming to branches so that they can sell us something we don't need - and we're much less likely to buy unnecessary stuff from banks on the internet."

He accepts that there is still demand for branches, for those who need to cash a cheque, sign for a mortgage or discuss their savings options face to face. Those communities without any branches often feel left out.

Shredded bank statement Many people now receive their statement online, rather than in paper from the branch

Yet he still seems far from convinced about the idea of the modern branch.

"In my case, slicker, brighter, safer and more informative branches would be a nice thing to have, but I am not sure they would draw me in beyond curiosity nor would I want to pay for them," he says.

"I have already left a bank when it told me their in-branch deposits had a higher interest rate than their online offering. My view of this was, 'Hey, not only do they want me to waste my time going to the branch, but they are also going to try and sell me something - no thanks.'"

Cashless kiosks

A report by brand consultancy Bancography says there is a long-term future for branches, but they will need to change and adapt with modern technology to remain profitable.

It says cash machines, online banking and mobile banking have not replaced the branch, but have just given consumers more choice. Branches are increasingly popular with customers as their financial lives become more complex with age.

Cashless kiosks could concentrate on basic services, such as opening accounts, and there may even be the possibility of banks linking up with workplaces to allow people to complete transactions from their desks.

"Branches still matter, because consumers say they do. The role of the branch is changing, but the fundamental consumer preference for it endures," the report says.

The collapse of the deal that would have seen the Co-op buy more than 600 branches from Lloyds has prompted more debate about competition in High Street banking in the UK.

But even if the banking names on the High Street do not change, their branches may start to look a little less uniform and a little more imaginative.

And, you never know, they might eventually be the place to go for a nice coffee and a comfy seat.


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  • rate this

    Comment number 185.

    Banks need to become a service to their customers again.

    The staff need to be suitable remunerated rather than motivated by pushing 'products' down customers' throats.

    Yes a monthly fee is appropriate, and yes they need to be completely separate from any casino elements.

  • rate this

    Comment number 184.

    Why not just use e.g. paypal? They can do much of the ad-hoc 121 pay / receive (but charge you for the privilege @ I believe 20p + 20% of txn value in or out). they even have 'subscription' payments but they have to be linked back to a bank ac or c/card.
    Won't help you with a mge or loan & don't see many employers willing to credit salary to a paypal a/c so may have limitations

  • rate this

    Comment number 183.

    I would rather see large banks broken up.
    I would rather see stiff banking regulation with meaningful fines and/or jail time for breach.
    I would rather know that banks are serving me, rather than I supporting their various negligence & malefeasance.
    I would rather not pay for financial spas - what do they have to do with MY financial needs?

  • rate this

    Comment number 182.

    Are they just in need of a make over to do what?

    To turn themselves from the rapacious assault monkeys of Capitalism into the sweet lambs of support for honest toil?

    I don't think so...

  • rate this

    Comment number 181.

    165. nagivatorjan

    The system would require maintenance, and I don't expect people to work for free. So, yes, a monthly fee. But no overdraft charges, no £12 letter fee, etc. It would work out cheaper than having a bank account.

    It won't be for everyone, but the point is to break the monopoly banks have over our daily transactions.

  • rate this

    Comment number 180.

    jgm2 @ 168 said:
    "The Co-op supports the economy destroying Labour party. Without their support the incompetent jackasses wouldn't have borrowed the UK into oblivion. We should all boycott the Co-op. I do."

    Thanks for that little gem.

    Please let us know which bank you use and describe its ethical standing.

  • rate this

    Comment number 179.

    177 BluesBerry
    "posh branch"
    You raise a good point I think.
    Some people are prepared to pay a bit extra just to keep the riff-raff out.

  • rate this

    Comment number 178.

    You don't get it do you? See mine @ 150 & 158 & 169.JohnSmith
    It's just so much more complex than you think. Txns these days can be anywhere in the world. Really think your smartphone App could handle everything some of those ancient mainframe progs do?

    175.nagivatorjan knew of someone who did similar @ Barclays Int back in the 80's: no crim pros in return for the how he did it!

  • rate this

    Comment number 177.

    I am Canadian.
    I don't care what my branch looks like.
    I care how it performs - whether I get my needs met, without undue pressure for products that I do not need.
    This posh branch (pictured) raises my cockles; don't elites have enough extras already? Do you think they wait in line?

  • rate this

    Comment number 176.

    172.Parallel World

    Fair point.

    But what do we do? Sit back, put our feet up and wait for it all to come crashing down?

    Ignore it and hope it goes away/sorts itself out?

  • rate this

    Comment number 175.

    158 Katz_in_Bedford
    Me too and an ex-developer as well - and we had a problem with someone hiving off small quantities to another account. I work in FX trading apps these days but used to be in general banking and mortgages, so I'm well aware of the 'complexity and regulation'.

  • rate this

    Comment number 174.


    Nobody is that stupid.

    Stop playing silly beggars.

  • rate this

    Comment number 173.

    I live in Canada and, whilst the local branches of my bank are not as swish as the North Shore Credit Union, they do offer good service. And they never try to sell me anything beyond what I ask. And they offer a really reliable online service. The downside? We pay monthly fees for banking.

  • rate this

    Comment number 172.

    162. GravityBeckons
    We have the power to effect change any time we like..... Yet despite this, we choose not to. I wish I knew why.
    I do not have the time to work through the weasel words on everything from gas supply to car maintenance, simply because 'services' (incl. banks) are run unethically - and then to constantly monitor them and disentangle myself from their octopus-like contracts

  • rate this

    Comment number 171.

    151 Further

    This being the real world, was Kai Konrad posturing the demise of the €URO and Merkel wanting interest rates increased. Oh to be able to chatmatters over with each in their local branch.

    For the first time we hear from the immediate consultant staff of the German government that the euro is not a long-term project anymore.

    Hello..... is anyone there?

  • rate this

    Comment number 170.

    Was astounded when Barclays tried to convince me we'd be so much better off tying up our existing 250K in some complex investment product, and then borrow the 250K back to buy the machinery. Crazy!"

    Have you tried looking into peer-to-peer funding (eg: Zopa, Funding Circle, Rate Setter etc)?

  • rate this

    Comment number 169.

    154. Graphis

    It realy is not that simple. The banking system is very complex. Every seen the software bank staff use? It looks way out of date. Thats because it is stable and tested to death. When you make a transfer to a bank in another country it can pass though 4 other banks. You don't even seem to understand the basics of how money transfers around. Its not like an email saying "I owe you X"

  • rate this

    Comment number 168.

    162 GravityBeckons

    'I made the switch to Co-op banking a while ago, I wish more people would do the same.'

    The Co-op supports the economy destroying Labour party. Without their support the incompetent jackasses wouldn't have borrowed the UK into oblivion.

    We should all boycott the Co-op. I do.

  • rate this

    Comment number 167.

    @153 When you're queueing up in your lunch break, and the bank has 10 counters with only 5 in use, what's the point of the couple of people in the background wandering around pretending to be busy?

    The answer may be that at lunch time some staff are having lunch.. and those hovvering in the background aren't actually cashiers. It isn't as simple as just jumping behind a counter at a whim

  • rate this

    Comment number 166.

    158. Katz_in_Bedford

    Those are things which will have to be worked out. You don't expect me alone to come up with all the answers right away, do you? LOL

    Sure there's hurdles to overcome, but the basic premise is sound, and if done properly, millions would take it up, as it would be a viable alternative to the current system.


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