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| It's not a branch, it's a campus (August 2010) |
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It’s not a branch, it’s a campus—part of a new series on the Community Bank of the Future Philadelphia’s Beneficial Bank repositions offices as places to learn about finance By Steve Cocheo, executive editor, This e-mail address is being protected from spam bots, you need JavaScript enabled to view it Gerard Cuddy, president of $4.7 billion-assets Beneficial Mutual Savings Bank, admits to having been something of a “big bank snob” in the younger days of his career. Yet he made the shift to Beneficial in 2006 and is convinced smaller banks have a strong future. But not necessarily the same future they might have thought to get used to. “The internet is a flattener,” says Cuddy, also president and CEO of Beneficial Mutual Bancorp, the holding company. Cuddy says it accelerated the industry’s trend towards commoditization. For community banks to stand out, he believes they must evolve, in some ways, into something different. Hence the opening of two offices in Cherry Hill, N.J., that the bank calls “campuses,” not “branches.” Why “campuses”? Beneficial is trying an educational approach to banking. In one sense, it’s not such a wild transition. Beneficial, 157 years old and founded as Beneficial Savings Fund Society, has long had a link with education. The savings bank movement, in many ways, began as a means of demonstrating the virtues of thrift. Cuddy himself goes a ways back with Beneficial. “I’ve been a customer of the bank since I was five years old,” says Cuddy. “I remember a Beneficial banker showing up in school every Friday.” The banker, of course, was gathering deposits through Beneficial’s school banking program, part of how savings banks traditionally educated children about finance. But Cuddy sees more to the educational angle. He likes to point out, for instance, that Beneficial’s philosophy on employee education is different. “We are not training to sell, we are training to understand.” He means understanding what customers need from their bank at every stage of their life. Recently the bank began offering every consumer accountholder free access to Intuit’s online FinanceWorks budgeting software. (FinanceWorks for Small Businesses will be offered later on.) “Beneficial is as much an education company as it is a bank,” Cuddy wrote in the 2009 annual report. “We are firmly committed to educating our customers and ourselves toward the end of understanding their situation, their goals, and their planning options.” Often, this kind of statement amounts to pleasant-sounding lip service. Except that Beneficial actually spends money on it. In May it opened the two campuses, intended as the blueprint for the bank’s next generation of offices. Each includes: • Financial Learning Library (the bank has trademarked the name), which is stocked with recommended books and loaded iPads, covering financial services and strategies appropriate to all stages of life. • Educational workshops—Each campus features a regular round of free basic educational workshops. • Conversation Stations—These private meeting areas allow customers to meet with the bank’s resident experts for answers. “Many of our employees like to talk things out before they sell someone something,” Cuddy explains. To help set apart the campuses from the usual bank branch, there are also sitting areas with coffee and WiFi, called Knowledge Bars, and the Little Learners’ Corner. Cuddy adds that he’s not naïve. He knows that sometimes people just want to get their banking taken care of: “If you’re in a hurry, we’ll get your transactions done,” he says. People factors play a role Beneficial intended these campuses to be a notable shift from the past. The hiring process was changed. “We interviewed and hired on the basis of personality,” he explains. The bank tended to look for people who had worked in retail stores. “Then we taught them banking,” Cuddy explains. That education took five months. To support the laid back, consultative aspect of the educational offices, the bank has been working on different metrics than usual for the evaluation of performance. Cuddy sees the education approach as one way community banks can set themselves apart, and doesn’t believe an “educational branch” would have gotten off the ground at a megabank. “This would never have survived the first focus group or consultant meeting,” says Cuddy, “but I think this is a great time to be talking financial responsibility and savings.” • Rethinking community banking—for survivalLaunching a print-and-online series on the future of your bank, and your jobWhat is the community bank of the future going to look like?” This question came as a group of bankers gathered around a conference table in early May. They had spent the morning sharing angst. Then they decided to look forward. An Ohio banker said: I intend my bank to have a future on the other side of this “Valley of the Shadow of Death” we’re all facing. So do you all. So, what are we going to look like? How will we appeal to today’s young people, who never go into banks, who think “good service” means a reliable WiFi connection; the latest iPhone; an online banking site, or, better yet, a killer mobile banking app; and debit and prepaid cards? How do we stay relevant? Shortly after that conversation (ABA BJ was sitting in), we presented it online as the lead-in to a speculative “op-ed”-style article about what banks could learn from Apple Stores. Thousands of bankers have visited www.ababj.com to read the article (speedlink: www.bitly.com/cbankfuture), and we’ve had insightful comments posted by community bankers, some younger bank customers, a noted consultant, and others. What we’re doing In the wake of the Dodd-Frank Act and as banks come out of the recession, we ask: • Does the look, function, and reason for being of the community bank office have to evolve? To what? (This month’s column looks at one example.) • Does the customer base evolve? • Does the business mix evolve or migrate? • How does the community bank push personal service into cyberspace and the mobile world? • Must compliance and other support costs be the boat anchor that drags banks down and out? Or are the imaginative ways to share such costs? Nothing is assumed. Everything is up for grabs and for rethinking. It’s your future. Where we’re doing it You’ll see “Community Bank of the Future” articles in this magazine, but stories won’t only be there. Like the Apple Store article, some will be online. We’ll be looking at structures, strategies, tools, new models, and people. Keep up with this by reading ABA BJ and reading alerts to new postings in ABA Banking Journal Report, our free weekly e-letter. (Subscribe at www.ababj.com/e-newsletters.html) What you can do with us No one size fits all. We want to hear from bankers. When articles appear online, post a comment. When they appear in print, send your thoughts in a letter to Editor-in-Chief Bill Streeter or myself, or send an e-mail. (Count on us publishing them.) But don’t wait just to react. Tell us now what your bank is trying and thinking.
—Steve Cocheo, exec. editor
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