Bank innovation not always technology – a bread smell example

A bank CEO once said to me, “We can’t do innovation, we’re a community bank. It’s not like we can create a new mobile phone.”

Innovation means new ideas, not just new technology ideas. The misconception is reinforced by the media, since the organizations and interest groups that talk about “bank innovation” usually mean “bank technology innovation.”

It’s a common mistake, but one that can bury non-technology innovations so deeply that banks and their Boards might miss out on low cost, highly engaging ideas that could increase customer growth faster than a slick phone app.

An illustration – with baking bread. A bank investment officer with one of the nation’s largest bank dealer brokers once presented at a banking conference about how his branch in Racine Wisconsin generated $1 million in business. He had the highest growth of any rep in the country, from a town less than a third the size of Buffalo. What was his innovation? At 7:30am and 11:00am every day, he fired up a bread making machine.

His presentation went something like this, “The branch was always full of fresh bread smell. We tore off warm chunks, spread them with soft butter and a dollop of jam, and offered them to anyone who came by our corner of the branch.”

“So you mean,” asked someone from the crowd, “having bread smell around increased sales?”

“Yes, but you’re missing a step. Having bread smell around brought happy memories of being in a warm kitchen with close family, and that made them more open to talking about investing in their future.”

This is not a suggestion to bring bread in branches. This is a suggestion that bankers think beyond technology to non-technical ideas that could create meaningful, business generating experiences.

For those who think branch banking is dead, whether or not it has fresh baking bread smell, here is my take. Branch banking as transaction hubs is dead. Branch banking as business hubs is far from dead and has a lot of future potential to be even better. Branches as community hubs are worth researching, but will depend on how imaginative banks are at addressing the community needs, and being surprising and spectacular at making the community hub a place worth using.

In all cases, baking bread smell can’t hurt!

Photo Credit © Can Stock Photo Inc. / ehrlif