As Banking Moves Online, Branch Design Takes Cues From Starbucks

The redesign is part of a broader strategy: Since 2017, Citigroup Inc. has been overhauling hundreds of branches to reflect a growing focus on customer relationships and advisory services, instead of check cashing and money transfers. Compared with pre-pandemic levels, teller transaction volume is down 40%, while prescheduled appointments with bankers have tripled in the last two years. “People don’t come here for quarters anymore,” says Matthew Wendt, a Citi area director in New York City.

Increasingly, customers are visiting physical banks to receive guidance on products such as mortgages, loans and financial planning, while accessing more basic services online. These trends are industrywide, and Citi isn’t the only bank to rethink its physical spaces in response. JPMorgan Chase & Co. has renovated 2,300 Chase branches since 2018 and plans to redo 1,700 more by 2027; at one of its branches near New York’s Grand Central Terminal, there are more than 50 offices for advisory services and no teller lines. Bank of America Corp. finished up a three-year effort to modernize its branches last year and is about to start on a round of exterior touch-ups. The number of teller windows differs from location to location, depending on transaction volume; they’re no longer a focal point for interiors.

At a BofA location in the Williamsburg neighborhood of Brooklyn, New York, that opened in December 2021, the teller line’s been reduced to a single window behind a plant wall and lounge area. “We want you to walk in, have it feel very comfortable, very intuitive,” says Rebekah Sigfrids, BofA’s head of design. The company’s taking design cues from Aesop and Starbucks Corp., two companies known for adding locally specific flourishes to their stores while maintaining brand consistency. Since 2017, BofA has seen advisory appointments grow by nearly 50%.

Kai Olsen, a director of interior design at HOK, which has done work for banks including Chase and Banco Santander SA, says the goal for banks is to make people feel comfortable spending time and even hanging out in retail locations. At the most extreme end of this trend are the 55 Capital One Cafés that now pepper cities across the US, where staff fade into the background and patrons sip lattes in plush booths while chatting, remote working or taking meetings. “With everything shifting to the ability to bank without a retail brick-and-mortar component, banks really need to redefine what it means to have a physical presence,” says Olsen. While it’s still possible to cash checks and make deposits at revamped branches, today’s consumers want a “different kind of connection than the very transactional way banking was conducted in the past.”

At the turn of the 20th century, many Americans were just becoming familiar with banks as a part of daily life. The number of bank locations multiplied from 119 in 1900 to more than 3,500 in 1930, according to the Federal Reserve, and the massive stone structures, typically set away from other buildings, aimed to project strength, stability and trustworthiness. Many of those buildings are still around today, albeit serving different functions: The Greenwich Savings Bank in Manhattan is now an event space, the Kansas City Library’s central branch is in a former First National Bank building, an old Citizens National Bank is a bookstore in Los Angeles and the Colorado National Bank building is a Marriott in Denver.

A shift away from that classical style caught on after World War II as banks took cues from department stores and fast-food restaurants. In came big, open windows and drive-thru banking. The number of branches continued to rise, to a peak of almost 83,000 in 2012, according to data from the Federal Deposit Insurance Corp. In the wake of the Great Recession, the presence of bank branches elicited anger in some places, especially as other retail businesses struggled. “They are the new urban blight,” Thomas Beller wrote in the in 2012. That year, the New York City Council passed a zoning change to try to limit the number of bank branches on the Upper West Side.

By the mid-2010s companies were rethinking their retail strategy. Branches were still a key element of bank brands, but the experience was reoriented toward building a rapport between customers and advisers. Branches are now seen as a way to “develop relationships and then to graduate those relationships to broader product sets that we offer,” says Craig Vallorano, US head of retail banking at Citi. The company’s betting that pleasant experiences will pay off down the line when a customer needs a home loan or financial management services.

Overall, the number of physical bank branches in the US has been shrinking for years. Citi has reduced its footprint from about 1,000 locations in the 2010s to roughly 650 today, a figure it plans to keep relatively stable. Bank of America has roughly 3,800 financial centers today, down from 6,100 in 2010. JPMorgan Chase’s branch count has stayed relatively stable at around 5,000 since 2018, though it has plans for hundreds of new locations in cities where it hasn’t traditionally had a large presence, including Boston, Minneapolis and Philadelphia.

In some locations, banks are also trying to cultivate a deeper connection not only to customers but to the neighborhoods they serve. In 2019, JPMorgan Chase opened the first of what it calls its “community banks” in Harlem, where murals by local artists cover the walls and the lobby occasionally features pop-ups from area businesses including chocolatiers and hairstylists. There’s a large conference room and event space with a garage door that opens to the street, to invite people in from the sidewalk. During the pandemic, the branch opened its doors to students in the community so they could use its Wi-Fi and computers for remote schooling. “Chase is known as the bank for the rich and didn’t really have a good reputation here in the community,” says Rocky Chowdhury, a community manager at the Harlem location. The new model is an effort to address that perception.

Sigfrids’ team at Bank of America wants its branches to fit into their community from a design perspective as well. The bank’s financial center in Williamsburg is in an industrial facility that used to house a metal fabrication company. Inside a vestibule, the bank displays a sculpture with various industrial pipes, beams and valves arranged like a collage that the previous company left behind. A site under construction in Palm Springs, California, is located in a mushroom-shaped, historic midcentury modern building. The design team talked through the renovation with the local preservation commission, and the revamped location will include terrazzo floors that evoke the original building’s design. A new location in Cincinnati is set up like a more traditional bank with modern finishes, Sigfrids says. Staff and customers have taken to calling it the “bougie bank.”

As banks compete for customers, HOK’s Olsen predicts they’ll continue to focus on hospitality and curated customer experiences. “I think it’s something we’ll continue to see at banks of any size,” he says. “We don’t see the market going back to where it came from.”

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