How Capital One’s Cafe Could Positively Impact Retail Banking.
Corporate & Social Responsibility In Local Communities
Capital One has been rolling out cafes across the US. The cafes are open to anyone and enable customers to enjoy coffees in a relaxed environment as well as potentially ask about financial products and concepts if they desire. Initially, the cafe conjured an image in my mind of pushy salespeople trying to discuss current accounts with you while you try to order a flat white. However this image couldn’t be further from the truth, the cafe is designed to be exactly like your regular coffee shop where staff will only engage in discussion about finance or Capital One if it initiated by a customer. With my preconceived notions of the cafe removed and my understanding of how retail banking is changing I began to recognise how Capital One’s cafe could make a positive difference in the retail banking sector.
Statistics show that in the U.K. bank branches have been on the decline for the last 30 years and around 60 bank branches are closing every month. The change is driven predominantly by technological disruption and the impact of 2008 financial crisis. This has caused a significant impact on local communities where customers who do not want to bank digitally are left with very few options. In 2015 banks signed up to the Access to Banking Standard which is an agreement that banks will provide alternate services if branches are closed. Many retail banks have moved to collaborating with the local post office to enable retail banking to continue or providing mobile branch services. The cafe concept provided by Capital One could be another alternate banking option that provides the familiarity of brick and mortar branches to customers as well as providing positive benefits in the local community. Three ways a banking cafe could have a positive impact are:
Investment In SMB’s
Retail banks typically provide loans to small and medium businesses. The cafe concept could be an alternate investment option for these business models. Retail banks could sponsor local businesses like cafes, restaurants, and stores. The bank would provide investment and support in exchange for the business hosting their services in-store and providing repayments to the bank for a discounted rate. Retail banks would act an incubator for young businesses, they would be able to take more risk because they are having an increased oversight role in the business and providing guidance. The investment option could become a rotational model for banks where they help build businesses from the ground up, hosting their retail banking services in store until the business is well-established and then moving onto incubating a new business — creating a constant cycle of investment in the community.
Skills Development
The potential for skills development in this kind of partnership is huge. An employee could join the business as a part-time barista, retail assistant or wait staff. They may have no knowledge of finance, technology or investment products initially but by working in this crossover business model they would be given opportunities to be trained in the areas of digital, finance and/or investments so they can handle not only the day to day aspects of the business but also the work related to the retail bank within the business. This model would enable learning about money management which is increasingly important as personal finance continues to be ignored in school curriculum's. The Capital One cafes also host monthly community talks again providing further learning opportunities and investment in the local community. If retail banks enable local businesses to thrive with sponsorship then they will create pillars of the community where people development will thrive. The cross-over business would open up new career paths and learning opportunities to individuals whether it’s from working, volunteering or attending events at the business sponsored by the bank.
Inclusion and accessibility
The decline of brick and mortar stores will have a significant impact on communities specifically individuals with accessibility issues. Banking should be accessible to everyone hence why the Access To Banking standard in the UK was developed. If banks sponsor businesses then they can continue to provide traditional accessibility services in a format familiar to existing customers. Since branches are becoming increasingly digital it is expected staff will be spending less time on administration related work, therefore, more time and money can be spent on training staff to have an accessibility first focus. By having this focus banks will be able to create a better experience for all and offer services to communities that have often been neglected during massive technological disruptions. This will significantly benefit communities that feel outcast by change as well as develop a loyal customer base for banks who prioritizing customer inclusion.
It is easy to claim brick and mortar retail bank is dead. However, if you look at retail with a different lens like Capital One has, you can see that with out of the box thinking we can reinvigorate community banking and re-focus on local investments. This can be increasingly important at a time where our sense local community feels lost in our digital bubbles.
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