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The bank of the future

Fast-forward to the future: ING Direct's concept for digitized bank branches
Source: Marco Michele Rossi | Newtone Architects and New Architects

Banks around the world are in the midst of a transformation. More of them are downsizing, consolidating and integrating technology into their branches. And some braver banks are even reimaging how banking services fit into the 21st-century technology revolution.

Global banks, like BNP Paribas in Paris, Barclays in London and Citibank in New York City, are experimenting with bank branches that have chic lounges and edgy design that resemble the cool sleekness of an Apple store more than the beige walls and plastic-plant look of the past. Elsewhere, banks are even throwing cardless access, smart ATMs and interactive banking walls into the mix.

Take Banco Bradesco, one of Brazil's largest banks. At its Sao Paulo branch, a robot greeter guides consumers into the bank, which has interactive banking tables, a lounge area and giant touchscreen banking walls. ATM access is done with biometric log-ins using hand recognition.

Umpqua Bank

"Some banks are becoming innovative companies that deliver technology faster," said Mike Baxter, head of Bain & Companies Americas Financial Services practice. "Other banks are stuck in the mud."

Granted, some innovations are more sizzle than real meat. Interactive banking walls lack privacy, and robot greeters are usually just clever marketing gimmicks. But banks are fighting for customers, say experts, and they want to be more attractive while cutting costs. As banks begin to rethink the gadgets they will offer, some have already done away with iPads for customer transactions and the touchscreen desks they recently adopted.

Instead, banks will become community hubs, said Tim Greenhalgh, chief creative officer at the global design firm FITCH. "Society needs more community," he added. "Starbucks isn't enough. Why can't a bank be more like an art gallery or media space?" Old bank design that includes a cup of coffee is dead, he said. "People want a bank that feels more like a retailer."

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These retooled branches will survive, while other branches fade out. According to a Jones Lang LaSalle study, up to 50 percent of U.S. bank branches will be obsolete by 2020. "Everything can't be automated," Baxter said. "So a bank might put a café in a branch to start conversations about banking needs." For example, BNP Paribas' flagship branch, near the Paris Opera, has a futuristic lounge filled with retro furniture, interactive walls and a plant wall.

Banks may soon pop up in more small convenience stores and health-care centers. And they probably won't just dispense cash. "In 15 years you'll go to a bank because you have banking issues," said Paul Schaus, president of CCG Catalyst Consulting Group. "Technology will allow people to do their own banking by themselves, but people will head to banks to report problems or get loans."

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ATMs, which are decades old, will also be reinvented. Consumers will be able to pay bills, buy plane tickets, talk to bank tellers or even sign up for mortgages. "ATMs will do more," said Baxter. "And banks will find ways to make them more capable so they can have few tellers in branches."

ATMs in Asia have already leapfrogged Western ones. Banks in Japan let consumers buy planet tickets, along with dispensing cash. And the South Korean Shinhan Bank has smart interactive-banking kiosks that can communicate with smartphones.

"We will see an explosion of ATMs," said Greenhalgh. "They will be smaller, smarter and more automated."

Some banks, like Bank of America, are already putting video monitors on some of their ATMs so customers can talk to tellers remotely. Other banks are using ATMs that dispense change, sell prepaid cards or take cash deposits. Biometrics, the process of using fingerprinting to verify identify, will also be widely used, said Schaus.

The biggest wild card? The money transactions that can be made with some taps on your smartphone. "There's more functionality," said Baxter. "And the banking transactions will start on a phone or tablet before you're even close to a branch."

Cardless ATMs let you get cash within seconds by downloading an app. Eventually, smartphones, which have already made road maps and digital cameras nearly obsolete, could replace debit cards and even ATMs, add experts.

Enter the brave new world of banking.