In the last decade, the financial services industry has undergone many changes. Following the 2008-2009 economic crisis, policymakers increased regulations in the industry to protect banks against future shocks. Large financial institutions were required to have an additional capital buffer and a minimum amount of liquid assets. And the best-performing banks began to dramatically cut costs – including the cost of property.
At the same time, cloud-based financial services quickly evolved, leading to a rise in online transactions, which has further impacted financial services’ property needs. Today, in the midst of COVID-19, decentralisation or having many satellite offices rather than one large central headquarters, is not only paramount to the success of financial institutions but also plays a pivotal role in ensuring the health and safety of employees.
In my role as WeWork’s portfolio director for the Mountain West region, I partner with both traditional financial institutions and challenger banks to meet their property needs. While traditional banking has often been seen as slow to change, it’s actually experiencing rapid shifts in product and process that will have a long-term effect on its corporate property strategies. And although challenger banks are often nested within traditional banks as subsidiary startups, they also have their own unique set of requirements.
A global footprint
Banking will continue to have a geographically diverse footprint. WeWork is uniquely positioned to support that through our global network of prime assets.
Over the last five to seven years, traditional banks have started to decentralise their workforce both within cities and across markets. In large cities, the presence of remote work and advancements in cloud-based technology have allowed banks to move from a ‘one tower’ model in favour of spreading employees across multiple locations, often at a lower cost. WeWork’s portfolio of over 800 global locations ensures clients can quickly move into Class A locations with superior amenities.
Traditional banks have also been taking advantage of growing talent bases in tertiary markets, a trend that has accelerated in 2020 due to COVID-19. Cities including Atlanta, Nashville and Phoenix have become hotbeds of large bank expansion, in part because they offer a lower cost of living for employees and lower property costs. Pair this trend with the challenges of COVID-19 – where all industries require more space to de-densify their workforce – and these spokes become more attractive to large institutions.
While expansion into new markets has traditionally taken considerable time and money, WeWork delivers unparalleled speed and flexibility. With our global footprint and flexible deal structures, we can sign a contract on Friday and move your clients into their new office on Monday morning – saving your clients valuable time and capital.
Flexible deal structures
Challenger banks behave much like startups. Their strategies may challenge traditional banking products because they’re often mobile-first digital disruptors. But many challenger banks are funded by the largest financial institutions and present complementary business lines.
Still, these challenger banks are often viewed by the market as similar to startups – being strapped for capital and forced to prove their value quickly. As they prioritise speed in their operations, they need a flexible property portfolio that helps them mitigate the high opportunity cost of capital in their early years. WeWork offers them just that.
The talent and customer acquisition strategies of challenger banks also look a little different than that of traditional banks. Their customer demographic skews slightly younger, with an emphasis on early tech adopters. While traditional banks may be looking to attract talent with years of experience from competing institutions, challenger banks often pull talent in younger, urban markets that feature a high concentration of tech talent.
WeWork’s full suite of amenities and beautifully designed spaces are a strong draw for this demographic. And with our flexible deal structures and inventory in prime markets, WeWork can quickly help these banks find the space they need at the price point they want.
Customisable, secure spaces that adhere to strict regulations
Traditional banking is strict about who has physical access to its facilities, is sensitive about managing private conversations and has tight regulations governing client data. It also has specific needs around network access and space to house network infrastructure. Challenger banks, while they often operate independently, also have to follow these regulations.
WeWork has the ability to provide high-level physical and network security across all clients – from massive institutions like JP Morgan to smaller startups like Varo Money. With WeWork, clients have the option to complete full-floor or multi-floor deals, mitigating physical security concerns and ensuring that conversations remain private. Similarly, WeWork’s inventory is fully customisable, which means that floors can be set up to accommodate either open-floor, safely spaced work or closed-door, individual offices.
In addition to secure, physical spaces, WeWork also offers your clients the ability to control their own IT closets, ensuring that their DSP and ISP requirements meet regulatory security standards.
If you’d like to find out more about how we can creatively structure layouts, locations and deals to serve your financial services clients, please visit brokers at wework.com/brokers or email firstname.lastname@example.org to connect with us today.
Will Sandford is WeWork’s portfolio director for the Mountain West region, including Denver, Salt Lake City, Phoenix and Las Vegas. In this role, he oversees leasing, sales strategy and marketing for the region’s 1.5 million rentable square footage and 42,000 existing members.