No Small Feat: An Architect's Approach to Supporting Bank Facility Down-Sizing

A report by McKinsey & Company states that bank branch sizes have been on the decline since the mid-2000s. As experts in facility design for the financial services sector, Charles Vincent George (CVG) Architects’ direct experience over the last two decades confirms this evolution of the banking industry and forces the question:

As a point of reference, in the mid-1990s, CVG Architects’ work with Elgin State Bank involved planning and designing a 30,000-square-foot branch on a four-acre site with seven drive-up teller lanes. By the early 2000s, the average branch bank size, as evidenced through our work with First National Bank of Naperville and others, was still rather large at around 20,000 square feet. Today, forward thinking financial services organizations with active development programs are setting the trend by developing new micro-branches or sub-dividing larger banking facilities to be between 1,200 and 4,000 square feet with few or no drive-thru lanes (dependent upon site capacity).

Although branch footprints have shrunk, the services provided within these facilities are largely the same – with a stronger emphasis on the customer experience, branding, and smart technology. Advances in technology are also allowing banks to deliver the same services with fewer on-site personnel, supporting overall reductions in branch size, while also helping to keep real estate investment down.

The process begins with a thoughtful programming and planning effort that is facilitated by an open dialogue between client and architect. While best practices, prototypes, design standards, and brand adherence are always part of the conversation, our approach seeks to translate these traditional guidelines into customized design solutions that directly respond to the requirements of the specific financial institution and the unique expectations of their customers. Understanding the principles of traditional, large, bank design is imperative to being able to effectively consolidate large banks into micro-branches that offer both compliant and creative solutions.

When designing micro-branches, a flexible design approach is needed to accommodate programmatic needs. Traditional bank design separates employees from customers by using barrier-style teller lines and screen-walls to isolate additional tellers operating drive-thru facilities. This separation has typically required design of two separate work areas for two sets of tellers – front-of-house and backof-house. Utilizing Elgin State Bank and First National Bank of Naperville as reference points, this traditional design approach required 2,000 SF and 1,600 SF, respectively. Today, advances in technology and security have facilitated the Universal Banker approach, allowing bankers to perform multiple roles (personal banking / drive-thru / walk-up teller services) in roughly 450 SF of meticulously designed space.

How do we do it? We focus on leveraging technology – specifying self-serve kiosks, automated cash handling/cash recycling equipment, two-way video monitors, etc. – to maximize both operational and physical efficiencies and result in a flexible design solution within a reduced building footprint.

Kiosks. By replacing traditional teller lines with kiosk-based solutions, such as self-service digital banking and semi-private tablet stations that allow customers to get help from a remote personal banker, if needed, we can eliminate space-consuming physical barriers, help to minimize customer wait times, and reduce employee workload – all without sacrificing security.

Equipment. McKinsey & Company states that “operating costs of bank branches drop off significantly when cash is not handled by people,” and that “once cash is handled by machines, banks can achieve a step-change reduction in security costs, compliance costs, and staffing requirements.” Appropriate equipment specification can greatly enhance operational efficiency.

Two-Way Video. The use of two-way video further contributes to the development of more efficient bank operations and helps to achieve a smaller building footprint. In addition to allowing Universal Bankers to visually communicate with drive-thru traffic, the specification of two-way video monitors supports flexibility in bank design by allowing drive-thru lanes to be physically detached from main facilities when traffic patterns, property shape, or parcel size are not conducive to a single building design approach.

Above all, a bank branch is a real estate asset. As noted in a report published by PWC entitled “Retail Banking 2020 – Evolution or Revolution,” “banking was once all about real-estate – banks were located in prime locations and built to project strength, stability and safety.” Real estate – and maximizing its utilization – continues to drive activity in the built environment. As a result of the boom of large bank projects in the 90s and early 2000s, there is currently a surplus of real estate within larger banks that can be subdivided for internal or external use. Our recent collaboration with regional banks has us utilizing existing branch bank facilities to create workspace for internal departments (i.e. mortgage services, hoteling stations for commercial bankers, and training centers) outside the confines of their corporate mega-structures. This approach brings the added benefit of providing expanded touch-points between varied internal financial services departments and their local markets. Similarly, smaller community banks with large facilities are looking to subdivide their space by integrating cafés or coffee shops into bank branches, thereby adding real estate value and creating an amenity that helps drive traffic into their branch.

Understanding Location Nuances Finally, an architect’s design approach should proactively consider the key differences between urban and suburban rural bank facilities. Generally speaking, suburban and/or rural bank branches, while shrinking, are still trending larger than their urban counterparts. Banks in these locations tend to serve a role within the community and usually have a presence on Main Street. With a lower cost of land and the need to accommodate customers typically traveling by car, suburban and rural bank branches continue to provide parking on-site, as well as drive-thru banking functions, though both amenities are being implemented at a considerably reduced volume from 10-15 years ago. Down-sizing efforts for existing suburban and rural banks can be seen in the trend of converting large board rooms into community rooms or, in allowing local attorneys, accountants, and even post offices to occupy a portion of their Main Street location.

Conversely, urban branch banks, reflecting the high cost of real estate, have shrunken to as small as 1,000 square feet. These facilities emphasize ATM access, self-serve functions, and walk-in traffic only. There is typically limited or no parking available.

Regardless of exact project size or location, the proven strategies described above are consistently utilized by CVG Architects to respond to the micro-branch trend and are always applied on a project-by-project basis. These strategies can also be mixed and matched as ‘a la carte’ solutions to achieve desired space efficiency. Whether “small” by urban or suburban standards, micro-branches across the board present large opportunities to be enduring and memorable through flexible and creative design.

About CVG Architects: Contact our Financial Services and Micro-Branch Architecture and Design experts directly for more information or to schedule a meeting: Jeff Lietz, VP Commercial Architecture, at jlietz@cvgarchitects.com or Jenna Samples, Project Manager, at jsamples@cvgarchitects.com. IBA Associate Member