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Is the future of banks ... in a coffee shop?

The brick-and-mortar bank branch is a relict of the past, right? Well, not exactly, especially if you've got a bit of creativity and some entrepreneurial spirit. Today, there are a number of bank branches popping up across the country that don't look like our parents' branches.

Part of this evolution started with the rise of the universal banker model, the rejection of the teller wall and the implementation of smart banking technology. However, several banks are taking this all a step farther. Not content with just newer and better technology, they've opted to make a bank not a "bank," but something else entirely.

Branches expand their services
In addition to better technology, bank branches across the country are offering more services as well. No, not just different loan products or fee-free online banking, but services outside of the financial services industry.

"Banks think outside the box to draw in customers."

As a result, the "coffee-shop bank" was born. In certain cities, you can grab a cup of joe and learn about mortgage applications at the same time. This drastic branch redesign goes a step beyond what many banks have done in the past, essentially dropping a bank inside of your local Starbucks or Dunkin Donuts. While some branches have done a cafe-style layout, banks like Capital One are also offering a full menu of coffee-shop fare, from espresso to pastries.

According to a report from The Wall Street Journal, the Boston-based Capital One branch focuses more on coffee than banking. If you stop by, you can grab your preferred drink, but you won't be able to sit down with an actual banker, drop off any paperwork or open an account. Instead, employees are well-versed in Capital One's products and services and can direct you to the proper website for more information. 

Change responds to consumer preferences
This type of change is driven by evolving consumer preferences. Capital One believes that too few customers actually want to come in to open an account or take out a loan. Instead, they want quicker, simpler transactions that can be mostly completed online.

That is why the coffee-shop branch is more coffee than bank. With lower demand, there is no need to employ full-time bankers at that location. This approach has been taken by a number of banks, although to a lesser extent than Capital One so far.

For example, many banks are closing up branches across the country. Others are reducing the number of tellers or phasing out their drive-thrus. This is all in response to consumer demand, which has shifted the preferences to more online, mobile and flexible banking. Customers can now complete more transactions online, and when they do go into an actual branch, they want to talk to employers who are well-versed in multiple areas. Not just a teller, for example, but a teller and a banker and a customer service representative.

"Customer preferences can guide branch redesigns."

Banks play it safe to start
While this is a major trend in the banking industry, many banks are playing it safe. Change can be hard to swallow, especially for long-time customers. Any drastic branch redesign has to be carefully thought out.

One of the smartest courses of action is to actually take the pulse of the consumer. Many banks are polling within their branches, in order to learn what customers want out of their bank. This information will help guide banks in the right direction.

Of course, that direction could just be fewer tellers and more online services. Or it could be a totally new branch redesign, like putting a bank inside a coffee shop. The answer, though, is up to the customer.