Banking on fewer and slimmer banks

To fully exploit the planning and urban design opportunities that may come in the wake of the ongoing revolution in modern banking, they must be strongly supported by reasonable city tax policies.

Money (photo credit: INGIMAGE / ASAP)
(photo credit: INGIMAGE / ASAP)
The digital revolution in modern banking is creating significant opportunities for enlivening our urban public realm. In an urban setting, the street-level functions and design of buildings are of primary importance as it is on the ground plane that the real life of any city takes place. This is especially true for buildings bounding major public thoroughfares and open spaces. For it is the interaction between adjoining buildings and these public spaces that makes them interesting, lively and safe.
The problem with banks, their hundreds of branches (some 1,500 in Israel today) situated at most every key intersection and adjoining public squares in every major city in the country, is that they present our streets and squares with insulated, dead facades. When what is needed are small-scale retail businesses and several cafes, their guarded entrances, automated teller and cash machines kill any chance to make the public realm come alive.
In Jerusalem, to give but a single example, the all-important Ben Yehuda pedestrian mall in the very heart of the city center area is terminated at both ends by lifeless public open spaces. Zion Square to the east is surrounded by no less than three banks. To the west, Bank Leumi borders the square between the Migdal Hair tower and the Hamashbir Letzarchan department store; two most damaging dead ends.
But there’s hope on the way. In spite of the fact that the banking industry is by its very nature conservative, modern banking is now gradually undergoing significant change.
The need for the traditional branch bank is more and more being called into question. Although there will always be a demand for branches for those who need to sign a mortgage or discuss their savings options, or those who will never feel comfortable banking online and need the face-to-face contact to feel secure, with the advent of online banking, for many (especially the younger generation that grew up in the digital age) the physical branch facility is no longer relevant. As elsewhere, bank branches here are destined to become just an alternative for customers to do their banking, integrated with mobile and online banking.
Where previously banking services were slow and personal, they have become fast and mainly impersonal.
An automated voice-response system, for example, often replaces the banker. In the US, checks may be deposited by forwarding their image online. Bank of America has introduced video cash machines enabling customers to talk to a member of staff by video link.
Automation and modern communication technologies have made possible far more compact physical facilities. Banks no longer need the amount of space they occupy today.
Branches will be downsized, some moving to smaller alternative locations.
Bank branches in supermarkets are common in the United States.
Branch investment will decline.
Many branches, especially those in less populated outlying areas, may simply close, saving associated costs.
If bank closure trends in the United States and Great Britain are any indication, what all of this means is that the future here will see hundreds of strategically located street-level properties become available.
But it is important to emphasize that to fully exploit the planning and urban design opportunities that are sure to come in the wake of the ongoing revolution in modern banking, they must be strongly supported by reasonable city tax policies related to smaller commercial enterprises, as has already been done in major cities such as New York, San Francisco and Vancouver. It is the combination of online banking with enlightened city tax policies that will enable transforming hundreds of invaluable street-level properties, at long last, into major contributors to city life.
The author is an architect and town planner in Jerusalem.