Leveraging branch facilities for new revenue streams

There’s no denying the financial industry is going more and more digital. From mobile apps and neobanks to automation and AI, customers are enjoying the convenience of banking from anywhere.

But this leaves leadership teams with a dilemma: Lean into the digital transformation and close bank branches in the process? Or leverage those locations for new revenue streams and keep face-to-face interactions going?

According to the Financial Times, major US retail banks closed more than 250 branches in the first half of 2021—and analysts expect this number to rise in the years to come. But it’s not as simple as locking up the doors and handing over the key. They must file a closure notice with the OCC, the Federal Reserve Board or the FDIC at least 90 days prior, while giving their customers the same advance notice.

With all the rules and regulations, it’s not easy to close bank locations. Sure, it’s costly from a business perspective, but think of it from your customer’s viewpoint. They see their bank close brick-and-mortar locations and can’t help but wonder how business is going, leading to a waterfall effect of customer anxiety and attrition. For small and mid-sized banks in rural areas, this is especially detrimental. Your loyal customers may begin to look elsewhere and refer their friends and family to a different bank that instills confidence in customers.

But what if there’s another way? What if your bank didn’t have to close branches and instead found ways to save money and introduce new revenue streams? Let’s take a look at a few forward-thinking and innovative ways we can make bank branches lucrative again.

Coworking centers
Small and intermediate branches are ideal for coworking spaces, especially with remote work and the creation of small businesses on the rise. Global Workplace Analytics reported that by 2025, an estimated 70% of the workforce will work remotely at least five days a month.

Understanding these types of trends should make leadership ask how it will affect your industry. Not only that, but how can you come prepared to play into it so you’re moving forward with the times.

Renting out desks (or entire offices), forming an alliance with a local coworking center—whatever the approach may be, the bank environment is conducive to coworking spaces. Add in a few comfortable couches and chairs, maybe a small coffee bar with snacks and a productive playlist on Spotify, and you’re well on your way to creating a welcoming environment for remote employees and small-business owners.

With each of these suggestions, let’s think about the different components at play. You’ll have to consider costs, recurring revenue, trends and more. We’re using a four-star scale to demonstrate how these repurposing ideas will affect your business, with four stars being the most impactful.

Here's the rundown for coworking centers:

• Setup costs: ⭐⭐
• Incremental personnel: ⭐
• Ongoing revenue: ⭐⭐⭐
• Economic trend: ⭐⭐⭐⭐

Service-based bundles
Speaking of creating partnerships with other businesses, what if banks became a space where customers could receive other services, as well? Yes, almost everything is going digital, but people still need human interaction. Not because they want to discuss their weekend plans while cashing a check, but because we live in a time when consumers expect services to be a bit more instantaneous.

People want their questions answered quickly by a real person so they can check it off their to-do list and go live out those weekend plans.

So what kinds of services could you bundle with banking?

• Accounting + taxes
• Consultations + coaching
• Internet + cable
• Phone plans
• Package delivery + pickup hubs

Creating strategic partnerships with other local small businesses and franchises means increased foot traffic to your bank’s branches, as people can get more done in one visit, in one location.

Here’s the rundown for service-based bundles:

• Setup costs: ⭐⭐⭐
• Incremental personnel: ⭐⭐⭐
• Ongoing revenue: ⭐⭐⭐⭐
• Economic trend: ⭐⭐

Cafés + lounges
This concept stems from the idea that banks want to create a welcoming environment that will attract new customers and keep existing ones coming back. Capital One launched its cafès in several locations in 2019, providing a warm and relaxing ambiance where anyone, not just customers, could relax and refuel.

The goal not only being existing customer retention, but brand awareness, too. With more companies switching things up and creating an atmosphere where people actually want to hang out, potential customers will take note as they decide where to do their banking.

Now, this is easier to do for megabanks. But small to medium-sized banks shouldn’t feel deterred. They can assess the atmosphere their customers walk into and take a page out of the big-timers’ book with a few updates as a start.

Here's the rundown for cafes + lounges:

• Setup costs: ⭐⭐⭐
• Incremental personnel: ⭐⭐
• Ongoing revenue: ⭐⭐⭐
• Economic trend: ⭐⭐

Community events + fundraising
Top of mind for many consumers when shopping for products or services is how companies are giving back. They’re curious about your involvement in the local community: how you might be enforcing sustainability and recycling, what causes you stand up for, the charitable contributions you make.

Turning your bank’s branches into community event centers or locations for fundraising initiatives shows you’re going the extra mile. Connecting with nonprofits, agencies and organizations to host their events brings a diverse mix of people through your doors and shows you know what’s going on in your community, deepening your ties in the process.

Here's the rundown for community events + fundraisers:

• Setup costs: ⭐
• Incremental personnel: ⭐⭐
• Ongoing revenue: ⭐⭐⭐
• Economic trend: ⭐⭐⭐

Financial literacy classes
Expanding your services by creating a financial literacy program for current or potential customers means you’ll be their go-to for any financial needs. From students who just opened their first checking account to first-time homebuyers or those who are newly retired and planning for the future, your literacy program can (and should) support any and all ages.

To get started, you’ll want to assess the need for this type of service by attending meetings at your local chamber of commerce, the National Education Association and Rotary Club, among other groups. By bringing it back to the community, there’s great potential to serve the underserved in your area, like the Boys & Girls Club or Habitat’s Family Support Committee.

Financial literacy classes are a smart addition to your banking services, combining what you do best with the needs of the youth in your community.

Here's the rundown for financial literacy classes:

• Setup costs: ⭐⭐
• Incremental personnel: ⭐⭐⭐
• Ongoing revenue: ⭐⭐⭐
• Economic trend: ⭐⭐⭐

Call centers for remote employees
When deciding how you want to repurpose your bank’s branches, don’t forget to consider how this affects your current and future employees.

Since remote work is on the rise, turning your branch locations into call centers dedicated to supporting remote bank staff might be one of the easier shifts to make. You’ll already be equipped with the necessary technology, security and space for the remote employees who occasionally want a trip to the office. Plus, this idea continues to give customers an in-person option when they have issues they want to handle face to face.

Here's the rundown for call centers for remote employees:

• Setup costs: ⭐
• Incremental personnel: ⭐⭐⭐
• Ongoing revenue: ⭐
• Economic trend: ⭐⭐⭐

Let’s think outside the box …
We’ve covered a few innovative ideas for how small to intermediate-sized banks can repurpose their branches while increasing revenue, but there’s always room to go one step further. If you’re looking to really step outside to box, consider the following:

• What if customers could come in and set up their bank account while getting their car washed and detailed right outside?
• Think about ways you could incorporate dining options into your branch. Fast food at the drive-thru, anyone?
• How about yoga or HIIT classes after hours?
• Could your branch become an online grocery pickup location in rural areas?
• Perhaps the local farmer’s markets can set up inside and outside on the weekends?

It all comes down to how your bank can change with your customer. Adapting to their needs digitally and in person gives them the best experience with you as their preferred bank. Plus, by putting these ideas into action, you’ll cut the costs of closing branches while showing up for your local community at the same time.

If you found these ideas insightful, we’d love to share more strategies and trends with you. Sign up for our newsletter for the latest tips, articles and innovative ideas that will take your marketing to the next level.