Branch design: step X Step.

• Author: Sawicki, George Y.
• Position: Fundamentals - Tips on how to organize, design bank branches

Some time in the future, you may find yourself facing the task of building a new branch. Whether it's your first such project or your fiftieth, the following checklist can help you get your arms around the job.

New bank facilities can enhance an institution's image, growth and performance. The downside? Setting up and running new branches can be expensive. The process of building or remodeling a branch bank must be well conceived, organized and executed to achieve success and profitability for the bank.

Here are seven suggestions concerning how best to organize well-designed, cost-efficient building and remodeling projects:

Step 1: Establish needs through qualified research

Banks open new branches for a variety of reasons. Here's a checklist to help assess whether you need a new branch and, if so, what kind of facility is appropriate:

* How much space does your branch need? This may depend on whether you are pioneering a new market or expanding in an existing one, or on the size of the population the new branch will serve.

* Will the branch function primarily as a marketing statement? Will it be a billboard for your business? Should it be in a particular location--a developing area or a wealthy suburb--to establish your image?

* Are the demographics of the area changing? Are you trying to reach customers you haven't served before? Do you need to move a branch because the old neighborhood isn't what it used to be?

* Is the population shifting? Are your depositors aging? If it's an urban area, are younger people moving in on a wave of gentrification? When deposit bases shift, banks generally move too.

* Do you need a new branch to respond to emerging business trends? New companies and populations demand new services and facilities. Silicon Alley, on Manhattan's lower Broadway, for example, hadn't seen new branch banks for years, but the growth of dot-coms drove a resurgence in branch building in that area.

* To enable this new branch to compete, what will you offer? Superior service, longer hours, friendly people, better interest--these have appeal, but the two strongest pulls are still greater convenience and better rates.

* Will the new branch present new marketing opportunities? Today, banks are more like retail businesses than institutions and the focus is on developing customer relationships that offer cross-selling opportunities such as life insurance, brokerage services and money market funds. This change in perspective is embodied in the layout of new branch banks.

Step 2: Identify location

You've assessed the location from a business angle, but an architect can often spot important things the untrained eye might miss. These will be included in a site report, and might include:

* Strategic location and access issues. Is the location at a visible crossroads or near a train or subway station? If customers approach on foot, how difficult is it to cross the street? Does the approach by car involve making a left turn across three lanes of heavy traffic? Is parking available?

* Retail opportunity. Will your branch be located near other stores that will help attract customers? Near other banks? Locating a bank near existing banks can have certain advantages. A new branch typically will draw off about 15 percent of its deposits from other banks nearby.

* Expansion options. As your business grows, you may need...