Will the U.S. have fewer or more bank branches in the future? The great debate over the future of branches is far from over. As Katie Kuehner-Hebert points out in the American Banker article “More or Less: Branches’ Role After the Meltdown” (reg. req’d):

The predictions vary widely — from roughly 10,000 closings to more than 1,000 additions over the next five years — but everyone agrees on one thing: no matter what happens, the size, nature and location of the branches will change greatly.

The article goes on to cite TowerGroup’s Tom Brogan, who predicts that banks will simultaneously increase in number and shrink in size. We’ll have more branches, but they’ll be smaller. Even if you don’t buy his predictions for 1,200 net-new branches by 2013, his description of the meaner and leaner branch is compelling:

• Smaller footprint: 3,000 sq. ft., down from current average of 3,500
• Fewer tellers (replaced by ATMs, presumably)
• More use of technology, such as video phones for customer meetings with experts

Brogan doesn’t touch on it, but one has to wonder if the increase in branches and the heightened competition will lead some banks to go “hyperlocal” in their marketing efforts? Might some banks see their increased presence in towns, suburbs and city neighborhoods as an opportunity to be even more locally relevant than they were before?

Hyperlocalism is a term that describes the increasingly local nature of information. Thanks to breakthroughs in both Internet and geolocation technology (e.g., Google Maps mashups, GPS, geotagging of photos, videos and other user-generated content), we are awash in information that can be tied to very specific locations on the map. That information includes:

• News
• Weather
• Real estate data
• Crime data
• Local business data
• Classifieds
• Job openings
• Social networking
• Events
• Photos
• Videos
• Traffic
• Store pricing
• Customer reviews
• Directions

Hyperlocalism could also be used to describe what happens when marketers use very local data to increase the relevancy of their marketing in the branch.

Perhaps the easiest way to go hyperlocal is simply to tap into the stream of information that is available from the many (and growing) free sources on the Internet and then offer that information to customers who visit the branch. Our client, Caja Mediterráneo, currently does this in Spain, where they use their digital signage network to display very local real-estate and job listings as a public service.

Many banks already show regional weather information. But what about the weather for the local ZIP code, or even a four-block radius? Or current traffic on the local stretch of the expressway?

The data is already out there, just waiting to be harnessed. And new marketing tools, such as John Ryan’s Messaging Manager platform, will allow marketers to automate the process of pulling in and processing data, giving it a high-quality graphical treatment and then distributing it to thousands of localities.

An enterprising marketing department might take this idea even further, with the goal of making each branch far more locally relevant than their cookie-cutter competitors down and across the street. Some tactics that could be worth trying:

• Partner with local government to disseminate public notices and news
• Publish news from nearby schools and neighborhood associations
• Sponsor hyperlocal news (example | NYT article)
• Sponsor locally focused bloggers (example)
• Run live coverage or highlights of local high school games and concerts
• Display free ads by local small businesses (submitted via a centralized Web site)
• Host meetups of local professionals, consultants and small business owners (who can be found or gathered via LinkedIn, Twitter or Facebook, etc.)

What’s your vision for the future of the branch? What ideas do you have for making bank branches more locally relevant? Please leave us your thoughts in a comment!

Photo credit: Dawn Endico

Barclays president Robert Diamond, Jr. appears on CNBC

Barclays president Robert Diamond, Jr. appears on CNBC

Jeffry Pilcher at The Financial Brand has a brilliant post, “PR now completely overshadows ads in financial crisis,” which is highly recommended. It focuses on the need for big banks to avoid the temptation to advertise as they try to regain credibility in the eyes of the public. Instead, the post argues, banks should try to get the word out via executive TV interviews, speeches and op-ed pieces.

I certainly wouldn’t argue with the need for any company to manage crisis by becoming a visible and vocal presence in the media. But I would add that executives need to be equally visible with customers. So, while they need to get the word out, they also need to spread it internally.

The public furor over the financial crisis is simply going to take some time to sort out. In the meantime, customers have questions about the health of their own bank, and even more acutely, the health of their own finances. If ever there was a time for banks to be communicating with customers (and not selling at them), it’s now.

Below are just three ways that bank executives can reach out to customers:

• CEO message – What’s the chief executive’s take on the economy and the bank? What will the bank do for customers as times get/stay tough? On video, the format can be a monologue, or, if the CEO is not telegenic, a scripted Q&A with a professional presenter. If video isn’t possible, consider the use of audio, newsletter, statement stuffers or email.
• Online video – The cost of shooting and hosting video online is negligible. So, why not produce, post and promote a series of videos featuring key executives on issues that matter to customers? Some possible topics:
  - CEO on the “state of the bank”
  - Chief economist on the bank’s economic forecast
  - Head of Retail on how the bank is modifying products/polices to help customers
  - Head of Business Banking on how what the bank is offering business owners
• Executive roadshow - Local TV newscasts are actually enjoying increased ratings in this downturn. Yet, most of them don’t often get to interview top banking executives. Have any banks taken advantage of this by organizing a series of local TV interviews? The same interviews could be replayed in local branches to great effect.
• Branch visits – Lunchtime Q&A sessions at local branches can go a long way not only to get out key messages, but to demonstrate (not only at the event but via run-up promotions and post-event rebroadcasts) that the bank is trying to be accessible and helpful.

Don’t underestimate the importance of “trying.” After all, no single bank can cure the economy, much less save all its customers from economic perdition. It can take some tangible steps to soften the blow, to be sure. But when it comes to soothing customers fears, building goodwill and ultimately retaining customers, perception is everything.

Update (3/20, 12:50 p.m.)
And on the other hand, there’s this…

Ads Raise Confidence in Ailing Financial Brands (via @Kevin_McIntosh_)

I suppose for some customers, just seeing that the bank can afford TV spots provides the comforting impression that the bank is stable and solvent. Of course, it’s key that the ads strike the right tone. I’m sure there’s a fine line there, however. Some consumers may construe the adspend as an inappropriate use of money in this climate.

However, here’s an interesting find from the article that relates to this (and Jeffry’s) post:

When asked what factors would increase confidence in the safety and soundness of their financial institution, respondents cited:

* Seeing regular advertising for that institution (25%)
* Receiving regular mail or email offers from that institution (25%)
* Regularly seeing internet offers/advertising from that institution (21%)
* Reading positive stories in the press about that institution (44%)

Clearly, Nielsen drew the wrong conclusion from their own study. No single activity in the list has the impact of PR! Unfortunately, the study didn’t ask respondents about their would-be reaction to in-branch or other local activities as I described above. And even if they had, it’s possible that responents would have given it low marks, as there is no historical precedent for bank executives taking the message to the streets.