Associated Bank, Green Bay, Wis. Assets: $23 billion
Darren Dewey, senior vice president, director of retail
Time working on focused optimization program:
Associated is an association of smaller community banks in
Wisconsin, Illinois and Minnesota. Its branch network is one-third smaller than it was a decade ago.
Regular check-ins with business lines—all decisions are approved by executive committee including the CFO, chief retail
officer, commercial real estate manager and community market
leader. There were regular check-ins with the business lines
and business line scoping meetings at the onset of the process.
Validate your banks’ strategy:
This process is a combination of business, geographic and real
estate investment strategy. This process takes a community
market perspective, looking beyond retail strategy.
Get started with data—transactional, performance data, deposits,
ATMs, total square footage, deposits/square foot, demographic
trend data and behavioral segment data. Then look at performance versus opportunity.
Local market input helps you dig deeper into the data. For
instance, Wisconsin has great infrastructure, but new by-passes
in regional and middle markets have unintended consequence
of shifting travel habits. Branches still matter, and customers
still choose banks based on location, but the bank needs to
address that need in different ways.
Analyze and conclude:
In past five years, the bank has touched 200 or 230 branches—
updated or remodeled, some relocations, some de novos, consolidated some sites (re novo). The bank has many different
branch models out there today with a concentration of 4,500
square foot sites. By next year, any new “large branches” will be
in the 1,500- to 2,000-square-foot range.
Many of these existing 4,500-square-foot sites are in the
right place but are simply too large. The bank has been quite
successful in closing many of these spaces—keeping the drive-
through and cutting the branch in half. Other halves have become
restaurants, dentist and medical offices. The bank has been
careful with signage and directing traffic around the building.
The bank has added a transaction express branch type. The
first is located at the University of Wisconsin, Madison. This is an
aided self-service model at 1,000 square feet or less—reflecting
changes in business strategy, staffing and technology.
Transactional support comes from 24-hour self-service
zones with high-function ATMs and teller pods with teller cash
recyclers. Technology kiosks allow staff to easily demonstrate
online or mobile. The sit-down element of the kiosk can also
be used for self-service needs such as online loan origination
if the need arises.
This is a journey not a destination—changing market conditions and customer behaviors demand that the bank continues
to learn and adjust.
Words of advice:
Don’t be afraid of reducing your oversized space. But always
try and do it from a developer’s point of view so it is marketable in the long run.
This is a process that happens over time—stay connected to
the local market for qualitative assessment. Get to the data as
quickly as possible so you have something to base adjustments
on and to measure success. This needs to be part of a holistic
strategy—physical and digital together.
Case Study: A Journey, Not a Destination
What level of growth in number of households and household
4. Process the data to arrive at several conclusions:
income are expected?”
Hopson continues, “Understand market preferences and
commuting patterns. What is the willingness to drive in a
market? You may find that customers are willing to drive two
miles for transaction servicing but five miles for a more complex
transaction such as a mortgage or investment product. Take a
look at population density, customers in more rural markets
generally have a greater willingness to drive. Who wants to buy
in person? Who wants to service in person? Who wants to do
both? All of this data comes together to inform your optimi-
zation decisions. Do you exit or expand in the market? Which
branches do you close, sell or reconfigure?”
close, consolidate, invest, reconfigure.
“It’s about deciding where and what—the way you approach
data analysis must reflect your business objectives. Should you
Banks choose an appropriate mix of branch models to
support their desired customer experience.