The Rise of Multi-Purpose Banks

Bank and Coffee Shop

As patrons rely more and more on technology to handle their finances, bank branches struggle to remain relevant. People are accustomed to seeing bank branches on street corners or tucked into big box retail stores. Now banks and coffee shops are sharing real estate.

Strange as it sounds at first, the idea actually makes sense. Many people only visit a bank branch when they have to — it's a chore. However, people enjoy going to coffee shops. Hundreds stop into coffee shops on a daily basis, and some of them stay to use the free wi-fi or to catch up with friends.

Although the extra revenue that comes from leasing space to a tenant is a definite perk, what banks are really after is customers. By setting up shop with coffee houses, banks hope to capitalize on the influx of customers who come in for the caffeine, the ambiance, or the Internet access and might just decide to ask about a checking account or loan while sipping their latte.

A side benefit to this arrangement is the sharing of traditional operating expenses.  Monthly utility bills can be split up.  Building maintenance costs are divided in half.  By having a smaller branch, the bank can save money on labor costs as well.  This type of arrangement lends itself to incorporating the universal banker concept at the branch.  Overall, it's a win-win situation for everyone.

But are banks risking security in their efforts to get customers in the door? While the increased foot traffic associated with the coffee shop side could translate into more business for the bank, there are potential drawbacks with respect to security.

In traditional bank branches, no one goes to the bank to hang out for long periods of time. That behavior would be seen as suspicious, and someone would intervene. In a multipurpose coffee shop bank, on the other hand, potential robbers could sit for hours, using the coffee shop as a front to stake out the bank's operations.

With free public access to wi-fi, online security is an additional concern. That college student working on his term paper could actually be a hacker trying to get into the bank branch's private networks to access sensitive data.

The security of the teller cash drawer is another concern.  The multipurpose bank is often an ideal situation to incorporate a cash recycler into the branch.  The recycler performs three main functions in this environment:  it develops a more efficient customer experience, protects the cash assets at the teller line, and removes the need for a larger cash vault.  

In the rise of multipurpose banks, coffee shop bank branches are just the beginning. Other bank branches are integrating with niche retail stores selling locally sourced products, art galleries, yoga studios, community centers, and even fast food restaurants.

With the rise of these innovative partnerships, bank branches need to take stock of the security implications involved to protect the financial privacy of their clients and the physical security of cash on site.  Otherwise the benefits of multipurpose banks will be as fleeting as the sugar high from a caramel macchiato.