In a small storefront sandwiched between a coffee shop and a medical
equipment supplier, the future of consumer banking is taking shape in an Orange
Financial Partners Credit Union's new "smart branch" looks nothing like a traditional bank. There are no tellers behind glass, no safety deposit boxes and no vault in the back.
The cash-free branch, often staffed by just two employees, is about the size of a Subway restaurant. When customers enter, they check in on an iPad that takes their pictures and alerts an employee to help them open an account, obtain a money order, apply for a mortgage or access a variety of other services.
"The usage of the branches is evolving," said Nader Moghaddam, the credit union's chief executive. "With all the new technology available, the transactional aspect is as not as big an issue as it was a few years ago. The way (the smart branch is) structured provides a way for members to come in and engage with us."
Traditional brick-and-mortar bank branches have fallen out of favor with customers in recent years amid the rise of online and mobile banking. Since 1992, transaction volumes in banks and credit unions have fallen 45 percent, according to a recent study by consulting firm Financial Management Solutions Inc.
But many customers still want the personal attention they can get inside a branch, and Southern California is one of the few places adding banks nationwide. Last year, the local market gained more than a dozen branches even as most major markets lost bank locations.
The branches opening these days, though, have a few new twists.
Some lenders, including Financial Partners Credit Union and Wells Fargo Bank, are introducing smaller branch concepts that do away with teller lines in favor of a more personal touch with customers. New technology is becoming ubiquitous, from touch-screen tablets to real-time video chat devices.
Other banks are going bigger to move away from the cookie-cutter branches of the past and give their spaces a unique feel. City National Bank, the Los Angeles-based institution that has eight Orange County branches, recently hired the architects behind Apple Inc.'s signature stores to give the bank's new branches a modern vibe.
"Banks and credit unions have a long history with a lot of momentum in doing things the way they've been doing things," said Bob Meara, a senior analyst with consulting firm Celent. "Now, the strategic purpose of the branch is being revisited."
Branches remain important tools for banks when it comes to developing new customer relationships and keeping existing ones. And many customers, like hospital worker Maria Carrillo, still prefer to go to a physical location.
Carrillo, a 47-year-old Anaheim resident, said she uses the Internet for simple tasks, but likes to go to a branch for complex or high-dollar transactions. A three-year member of Financial Partners Credit Union, she has used multiple branches but prefers the new smart branch in part because it's easier.
"To me, it's better," Carrillo said.
Customers at the smart branch, which is across the street from Children's Hospital of Orange County, sign in by swiping their driver's licenses or another card with a magnetic stripe and selecting the reason for the visit on a
Most Popular Stories
- AIG to Create 230 Jobs in Charlotte
- 15 Myths That Could Ruin Your Hispanic Ad Campaign
- Russia Says Nyet to Canada North Pole Claim
- Bipartisan Negotiators Reach Modest Budget Agreement
- Justin Bieber Visits Typhoon Victims, Plays Concert
- Senate Dems Move Forward With Obama Nominees
- New Obama Aide to Focus on Climate Change
- Obama Nominee Confirmed for D.C. Appeals Court
- MasterCard to Split Shares, Raise Dividend
- GOP, Dems Strain to Unearth a Modest Budget Pact