2583559Reliance Bank has joined the ranks of retail banks that look to coffee as a means of waking up their branches. Reliance CEO, Rick Sems, told ABA’s Community Banking News, “The banks look like a bomb has kind of gone off and vaporized everybody”. Boosting branch traffic is a big concern for banks that are successfully moving customers to digital tools but rely on the branch to sell products and build brand loyalty. The question is: “Will customers, intent on a caffeinated refresher, will be interest in learning about financial services?”

In the late 1990’s, ING began opening Direct Cafés whose Barista-bankers personified the maverick brand, providing a reassuringly physical manifestation of a ‘virtual-bank’ at a time when most financial transactions were done in person. At around the same time, in-branch Starbucks kiosks began appearing in B of A and Wells Fargo lobbies as completely separate elements; requiring customers to complete one journey before starting the other. The ING model was so successful that Capital One built 4 more cafés in Boston after acquiring INGD’s US franchise, while the B of A and Wells formats never got much traction.

Despite these negative results, the concept continues to be popular with bankers, last May GECU partnered with local provider, Kinley’s House Coffee & Tea, to open a hybrid in which the bank occupies a mezzanine above the café. However, the jury is still out on the efficacy of selling DDAs to customers who come in for lattes, banks that haven’t struck a deal with a coffee purveyor should tread carefully. What worked well for an offbeat, virtual-bank brand in the 1990s may not resonate with the customers you are seeking to impress. Worse yet, prospective customers could leave thinking you don’t know who you are.