The Globe and Mail

It’s lunch hour on a Wednesday in Toronto and a new downtown café is open for business. The space has all its hip bases covered: tables made from reclaimed bowling alley wood, exposed brick, an iPad hub. All the menu offerings (tea, coffee, juice and pastries) are prefaced with “organic.”

Surprisingly enough, it’s a little hard to find. Passing by, you’d write it off as an outpost of ING Direct – that’s what the sign says. Actually, that’s what it is.

The online bank most Canadians know through its commercials (you know, the guy who urges you to “save your money”) opened its flagship retail location in downtown Toronto at the end of April. But it’s free of the pens-on-chains and long lineups that characterize most Canadian banks.

This is the anti-branch, where employees sport orange T-shirts (the company’s trademark colour) and mingle with customers. They can make you a coffee, and they can also answer your questions about TFSAs. If you want to know more, they’ll lead you over to the iPad hub and load apps that tell you about their products.

You can’t actually deposit a cheque or pay your bills here, though.

Kazuki Taka, 43, walked into the café after working out at a fitness centre across the street.

“They’re very casual. They’re very friendly. They’re not so much selling the company,” he says.

This is the fifth such location the Netherlands-based bank has opened in Canada. It’s part of a trend among European banks to address the declining demand for face-to-face teller services with community-oriented boutique spaces.

It also represents a dramatic change in the way Canadians now do their banking, according to Brett King, a financial institution adviser and author of Bank 2.0: How Customer Behaviour and Technology Will Change the Future of Financial Services.

“Ten years ago, a person would visit the branch, say, twice a month. Now it’s twice a year,” he says.

According to a 2010 survey of 1,200 Canadians by the Canadian Bankers Association, only 23 per cent said branch banking was their main form of banking. Online banking was at 45 per cent, ABM banking at 23 per cent and mobile banking at 5 per cent (though 23 per cent of those surveyed said they expected to start mobile banking in the “near future”).

“People seem to feel like they need branches,” says Peter Aceto, chief executive officer of ING Direct Canada. “But when you ask them about why they feel they need a branch or when they last went to a branch, an overwhelming majority of them actually don’t really want to go to a branch.”

Instead of waiting for customers to come into a branch with a specific task and then selling them on other financial products, the new model draws them in with unconventional bait, such as free WiFi.

“If a bank can say to you, ‘Well, look, if you come in and do your banking and while you’re here, it’s a comfortable environment, there’s free wireless, you can have a coffee’, this may encourage people to use that space more than just a bank,” Mr. King says.

There are other examples of a new approach across the country. Vancouver’s North Shore Credit Union – a company that caters largely to the city’s upper-middle-class residents – partnered with Weber Marketing Group and architects EHS Design to create locations that feel more like spas than bank branches.

Its Seymour Parkgate location has a concierge who greets customers at the front under a halo of carefully selected mood lighting. The wall and floor finishes are decadent. Local art is displayed on shelves. There’s even a play area for kids.

In its first week open, the ING café partnered with neighbouring businesses to offer sessions on everything from urban gardening to sewing buttons. It was all in the spirit of saving money in general, Mr. Aceto says.

Mr. Taka was drawn back to hear bestselling author David Chilton (of The Wealthy Barber fame) speak about personal finance. The crowd was a mix of windbreaker-clad retirees, office workers taking an extended lunch break and those that are “between jobs.” Many lingered after Mr. Chilton’s appearance to chat with employees.

Aesthetics are one thing, but the real change that must happen in banks, Mr. King says, is allowing customers to use whichever channels they choose for full-experience banking.

“A lot of the banks in Canada, a lot of the time, if you ask them for a specific thing or a specific product, there is still a situation where the bank will say you still have to come down to the branch and sign a piece of paper for that,” he says.

Royal Bank of Canada opened its first “RBC Retail Store” locations last year, which feature many flashy technology hubs to teach customers about personal finance and the company’s products. Instead of placing ABMs near the front entrance of locations, where most customers are used to seeing them, RBC has pushed them deeper into the locations as a way of forcing customers to explore the space.

At ING Direct, on the other hand, the café is there so customers can chat with staff face-to-face if dialling up the call centre isn’t enough. If some wish to continue only having a phone, Internet or mobile relationship with the company, that’s fine, Mr. Aceto says.

Mr. Taka says his two visits to the café have convinced him to open a retirement savings plan with ING Direct, but he’s still wary about the informality of the location. He doesn’t mind getting coffee from someone in an orange T-shirt, but prefers business formal when it comes to banking.

“I would still expect a private space and someone who can seriously represent the company talking about their products and services,” he says.