Jon Blakeney, co-owner and founder at experience design agency I-AM
Throughout this summer at the Baba Beach Club in Alassio, Liguria, sun worshippers enjoyed a hedonistic paradise led by creative director Glenn Martens. Created in collaboration with fashion brand Diesel, the Club featured Diesel-branded sun loungers, deckchairs, beach umbrellas, and towels. The revellers sipping their Aperols as the sun set into the Tyrrhenian were almost certainly not thinking about the future of banking – but they may have been living it.
Diesel, alongside many other fashion brands, is no longer relying on its stores as the sole physical route to connect with customers; it is finding ways to be present in places where those customers – and potential customers – already are. This idea could point the way to a radical answer to the question that has long faced banks: how to be more than a purely digital presence for customers whilst reducing the huge costs of their branch networks.
Repurposing branches
Customers want the convenience of online banking alongside the reassurance of a physical presence: branches. And banks themselves want to retain that IRL connection. In recent years this has led them towards increasingly innovative and effective ways to attract people into those branches.
For example, Bank Danamon and Isbank have both successfully launched community-led concepts that target local needs in each micromarket. Capitol One recently opened a new café concept in New York, JP Morgan Chase & Co has opened community centres, and Bank of America has even hired the designer of Victoria’s Secret stores.
It’s an effective strategy: according to an article in the Independent in June this year, the US is in fact now seeing a resurgence in branch openings, after years of closures.
Innovative fashion spaces
Yet it’s not the only possible strategy. If our core objective is ensuring that customers have access to high quality, in-person conversations at a time and location that suits them, then perhaps banks don’t need to rely on increasingly expensive real estate.
In an entirely different sector, fashion brands have been cleverly using pop-ups for the last five years to engage their target customers, not solely in their own stores, but also in the places where those customers already choose to spend their time.
Brands such as Dior, Gucci, Prada and Louis Vuitton have found ways to seamlessly integrate into their customers’ lives. Look at Dior’s Riviera pop-ups in Beverly Hills, Saint-Tropez, Bali, Seoul, Phuket, Kyoto and Capri. In Bali, its Diorivera Beach Camps offer an immersive style experience against a backdrop of glittering sea views.
The opportunity for banks
Perhaps banks too need spaces, not branches.
We were recently conducting one-to-one interviews with branch teams in Switzerland and the manager of a branch said that once cash disappeared all he will need is a great place to meet clients – it could be anywhere. On the same trip, we stayed at Citizen M Hotel in Zurich. Its facilities are exactly what a future bank will need: lounge space, meeting rooms and hospitality. Would it be so ridiculous for a bank to acquire a hotel chain and shut its branches?
It would make significant savings on running its branch network, and gain access to existing locations that run at a profit, give them all the facilities they need, and best of all are places that customers want to be in. Banks would lose the billboard value that branch facias bring, but would this loss be outweighed by the gains?
Of course, hotels are not the only option here. Banks could invest in community facilities much needed by local residents, from sport facilities to wellness centres and community hubs. This life-led approach would not only transform banking, it would also bring support to communities that need it.
Visionary stand out
The potential here is vast. Imagine Starling Bank as a seamless, useful part of the immersive atmosphere on the seafront at St Ives. Think about what Lloyds could do with a summer experience in the heart of the Cotswolds.
These short-term residencies would stand out from the pack, start conversations with new customers and balance an online offering in a positive way. Rather than being pop-ups in the expected sense, these would be short-term residencies of perhaps three months, testing the water in a new location and forging unexpected new customer connections.
The approach would not be for everyone. Each financial institution needs to examine its customer base and operating model to establish which approach to physical spaces suits best. Whether it be new style branches that have a redefined purpose and draw, such as IsMekan in Istanbul or one of Europe’s big banks reversing into Citizen M, or even a neo bank hosting a summer residence by the sea – the possibilities are endless and indeed exciting.
