How Community Banks Can Build a Better Branch

Bank branches no longer have to consist of a lobby with a teller line and desks for bankers. As customer preferences and banking behaviors have evolved, smart community banks are creating “customer experiences” with the help of innovative bank design, technology and a willingness to try out some new concepts. 

Open-concept floor layouts, welcoming design aesthetics, iPad-equipped tellers who walk out and meet customers as they come through the door, and tech-enabled teller stations are a few of the ways ICBA members are creating more inviting, personalized experiences. These moves also help community banks solidify their spots as customer service-oriented institutions, differentiate themselves from the competition and build stronger relationships with their customers. 

Williamstown Bank’s customers know that they can get their banking and financial needs handled at any of its four branches, but they also know that waiting behind the entry door every day is a freshly brewed cup of coffee or handcrafted beverage. The $226 million-asset community bank in Williamstown, W.Va., is situated in what president and CEO Sharon Anderson calls “a very competitive market,” populated with community banks and a large regional bank presence.

A warm greeting and a hot drink

A few years ago, Williamstown Bank assessed its traditional interior setup and decided that a refresh was in order to differentiate itself in a new local market. Customers had gravitated to more digital banking, for example, and the bank was looking for new ways to drive more foot traffic into its branches. “Our goal is to survive and remain an independently owned and operated community bank,” says Anderson.

The bank’s solution: a donation-based coffee shop built right into two of its four branches. “We visited a bank that was using a similar concept up in Ohio and really liked it,” says Anderson. (Read about Williamstown Bank’s inspiration, Richwood Bank, here.)

Today, the in-branch “The Giving Cup” coffee shop offers everything from espressos and lattes to frozen drinks, with all proceeds given to one of the six different local nonprofits the customer gets to pick from. That donation is what “pays” for the drink the customer receives. “As a ‘thank you’ for the donation, we craft a drink of the donor’s choice,” says Anderson. 

To date, Williamstown Bank has raised over $57,000 for those organizations through The Giving Cup program. “You don’t have to be a customer to participate,” Anderson says, “but as people come in and make their donations, we’re hoping to build rapport and start conversations with them.” Those interactions touch on the person’s current banking relationships, their mortgage needs, anything they’re unhappy with at their existing bank and so on. 

During the COVID shutdowns, the community bank offered a curbside version of its coffee service and rolled out more tech tools, such as iPads or laptops that universal bankers could use to get e-signatures from customers while delivering the drinks. It has also started using interactive teller machines (ITMs), which use touchscreens and video technology to “virtualize” the in-person banking experience, in all four of its locations. 

Anderson says Williamstown Bank’s goal is to make its branches feel warm, welcoming and inviting. It wanted to make interactions feel less transactional, which is why it moved away from using teller lines. For customers who are making larger cash deposits, the bank has also set up more private areas for handling those transactions. “Our ultimate goal is to give customers a great experience and build those one-on-one relationships with them using a more conversational—and less transactional—approach,” Anderson says.

Blending tech with personalization

If they want to capture a wide swath of younger generations of customers, banks “can’t just keep doing what they’ve been doing for the last 20 to 30 years and hope to thrive,” says Dave Throndson, SVP of sales at Milwaukee-based La Macchia Group Inc., which designed Williamstown Bank’s new branch concept. 

Community banks with a seamless mobile app experience, easy bill-pay tools and other streamlined processes are well-positioned to capture younger consumers. 

“That’s part of what we tried to do at Williamstown Bank, where the [customer touchpoints] include a mobile app, website, pop-up ads and other modern tools that are also mimicked inside of the branches as well,” Throndson explains. Going a step further, he says some banks are also using AI-enabled monitors and facial detection software in waiting rooms to quickly gauge someone’s age, gender and potential banking needs. 

“That way, when a customer advisor comes out to greet them, they have some good conversation prompts to work with,” says Throndson. He sees this as one more way for community banks to solidify their presence in the community and offer a more personalized customer experience, which is their advantage over megabanks.

For the bank interiors themselves, institutions are leaning into warmer colors, natural wood tones and comfortable seating. “The design itself promotes having staff members who can come out and greet people at the door,” says Throndson. Even a customer who is coming in to use the ITM to deposit a check can get some one-on-one time with an employee, who is there to guide them through the process as needed. 

“It’s kind of like the grocery store self-checkout lane, which some may prefer while others still want to wait in line for a live person to help them,” says Throndson. Community banks can cover the bases while still offering that personalized approach that they’re known for. “If they want to get in and get out, they can do that,” he adds. “But if they want to have a fresh cup of coffee and talk to their favorite team member, then they can do that too.”

Prioritizing community

With 38 branches and $3.3 billion in assets, F&M Bank of Archbold, Ohio, typically adds one new branch every year, for a total of five over the past six years. Some of those are fill-out locations where the bank may have a geographic gap, while others are in brand-new markets. But in 2023, the community bank opened five new offices, including one in Oxford, Ohio, that took the place of another institution that was exiting the market. 

F&M Bank has redesigned both new and existing branches over the past few years. Working with NewGround International as its design partner, the community bank began infusing more of its brand colors and logo into its interiors. Every branch also features a “market wall” that includes community-focused graphics. For example, after relocating its branch in Auburn, Ind., recently, F&M Bank made a market wall featuring images of the Auburn automobile plant from the early 1900s. “Everybody in town can identify with the plant and the impact it had on the community,” says Lars Eller, president and CEO. 

The community bank was also an early user of ITMs in its drive-through lanes, starting in 2016. While some customers still prefer the “tubes” (which are also available), others like being able to interact with the bank’s “community administration representatives” and even form virtual bonds with them. 

For its interiors, F&M has moved to using more one-on-one interactions with representatives, versus having customers stand in a teller line. “[In new branches,] we’ve moved to having two or three stations that are all sit-down,” Eller says. “That really helps with the overall relationship feel of being a community bank.”

Between 2019 and 2023, F&M Bank went through each of its branches one by one, giving them a refresh and aligning their look and feel with the institution’s new locations. The branches are now more colorful and include more branding and comfortable seating. It’s now considering forging a partnership with a national coffee shop to bring refreshments into select bank locations. “That’s something we continue to toy with, and I think I’d like to try it,” Eller says, “but we just haven’t found the right spot or partner for it yet.”

Beware of ‘overbuilding’

Dan Schaff, managing principal at HTG Architects in Hopkins, Minn., knows that some community banks struggle to attract younger generations of customers to branches. A fresh coat of paint and a few comfortable chairs may not fix the problem, but “overbuilding,” as Schaff calls it, won’t work, either. 

For example, HTG often gets requests for redesigns that require too much extra space or that incorporate unnecessary elements. “The key is not to overdesign,” he says. “We’ve had clients come in and basically say, ‘Well, we want the Taj Mahal,’ when in reality, there’s probably a happy medium that actually works better for the bank and its customers.” 

To achieve that happy medium, community banks should consider what they do best—usually high-touch customer service—and then keep that in mind when designing or redesigning a physical branch. Schaff says one approach could be to replace traditional teller lines with teller pods or have employees greet customers as they walk through the door. 

Regardless of what type of technology tools or design elements a bank is considering, Schaff recommends doing thorough research and due diligence ahead of time. This is particularly important on multifaceted projects where an individual or group needs to select, coordinate and oversee numerous different contractors and providers. 

“It’s a big puzzle of everyone coming together, pricing everything out, then working in close proximity to get everything completed at the same time,” Schaff says. “The best approach is to do your research and dig into it a little bit before kicking things off.”

Getting buy-in from all levels

Anderson says banks that want to refresh their locations should get buy-in from the top down and keep employees informed about the potential changes and how they’ll be affected. Right now, many people are afraid that automation will overtake their job in some way, for instance, but the reality is that community banks need good people to both run their operations and interact with new and existing customers.  

These needs aren’t going to go away, so communication is critical. “It was important that our employees understood what we were doing and why we were doing it,” says Anderson, who knows that some individuals may falsely assume that branches equipped with ITMs and video tellers don’t need any “live” employees in them. Particularly on the first branch it renovated, the bank mapped out the whole plan on a board and shared it with team members. “It was important for them to be in on the process,” Anderson adds.

Those early efforts have paid off for Williamstown Bank, which has received much positive customer feedback on its redesigned branches. “They love the concept of The Giving Cup and the fact that their donations are staying local and helping our community nonprofits,” Anderson explains. “They also like that our employees still know them by name, and they can come here for a one-stop shop for all of their banking needs.” 

Eller says F&M Bank has also received a lot of positive feedback on its branch redesigns from customers, employees and the broader community. For example, the seating areas give tellers a break from being on their feet all day, and the bank has also established areas where customers can get their banking done in a more private setting. 

“Team members aren’t out in the open in front of everyone asking loan applicants about their assets and income; that all happens in a private office now,” says Eller. “Both customers and the employees really appreciate that extra level of privacy, which in turn helps build even stronger relationships with those customers.”