Banking on Tomorrow

The best way to prepare for the future is to see it come to life before your eyes. That’s why executives from the world’s leading financial-services companies come play at the Merlin Center.


If Willy Wonka had made home-equity loans instead of Everlasting Gobstoppers, he might have worked in a place like the Merlin Center. As unlikely as it sounds, the 30,000-square-foot facility located in Stamford, Connecticut is an idea fun factory for the financial-services industry.


More than 2,000 executives, from firms such as Bank of America, Citigroup, and Deutsche Bank, have toured the Merlin Center in search of a few new ideas about strategy, technology, and customer service. The mind-set behind the magic: The best way to prepare for the future in a fast-changing industry is to see it come to life before your eyes.

“Our goal is to change the nature of retail banking,” says Bob Steele, the facility’s resident Wonka. “Banks need to think of themselves as purveyors of customer experiences, and they need to master cross-channel distribution — the integration of clicks and bricks. The experience has to be superlative, whether it takes place inside a bank branch, at an ATM, on the phone, or on the Web.”

Visitors enter the Merlin Center through a bright-red, megaphone-shaped portal and immediately find themselves in a darkened conference room. After a brief multimedia presentation by Steele (which features disconcerting quotes like “There is no place in the future for a bank, in the traditional sense of the word”), the back wall of the conference room rises like a curtain, and Steele leads the way onto a set of a city street.

The street represents a single-minded view of the world: Every establishment on either side of it has something to do with money. There’s a 6,500-square-foot megabank branch with a towering glass facade, a boutique brokerage banded by a colorful stock ticker, a drive-thru teller, and a smaller bank branch. Most of the light illuminating the street comes from shimmering plasma displays inside the buildings and from projections of promotional ads on the closed blinds of a store window. Occasionally, there’s a whooshing sound as a canister shoots through a network of vacuum tubes.

It is a thoroughly overstimulating environment, and that’s intentional: The Merlin Center is designed to push bankers to venture beyond their traditional intellectual boundaries. “It has only recently dawned on banks that they’re in the retail business,” says Steele, whose official title is managing director of the Merlin Center. “We want to make them retailers on the same level as Home Depot or IKEA.”

The Merlin Center opened in 1995 as an R&D operation for the John Ryan Co., a Minneapolis-based consulting firm that works with banks on retailing strategies. Steele says that the firm has spent a total of $15 million to develop and maintain the center since its inception. There is a payoff, though: Since the center was built, the John Ryan Co.’s consulting business has tripled, and it has acquired a reputation as a thought leader in the financial-services sector.


As with any decent theme park, the Merlin Center experience is based on a fictional story line: First Traditional Bank & Trust has made the decision to adopt an aggressive open-finance strategy, offering an array of financial services from a variety of different providers. “We decided to portray open finance because it’s the scariest and most challenging course for banks,” Steele explains. “It means that many of their products have been commoditized, and they’re forced to compete on service and customer experience in addition to price.”

The first stop on the tour is the flagship branch of Open Financial Network — First Traditional’s new identity. In the center of the branch, there’s a circular “core” for customers who want to conduct quick transactions. There are familiar-looking ATMs (albeit with screens that display full-motion video) alongside remote video tellers, where customers can interact with a live teller working away from the floor in a secure cash room. Checks and cash fly overhead through pneumatic tubes. “If you don’t have any cash on the floor, that makes it much less appealing for someone to rob the bank,” Steele explains.

All of the kiosks in the branch are designed to aid in the transition to online banking. The computers that customers use to set up a checking account, for example, have the same interface that they would use at home to check their balances, deposits, and other transactions.

Elsewhere there’s a seminar room where experts videoconference with customers on topics like e-commerce for small business, fiscal fitness for women, and saving for college. Another area, called “openware,” sells the top ten books and software packages on investing.

Bankers who visit the Merlin Center aren’t put through any sort of brainstorming exercises. Steele says that their wheels usually start turning the moment they step onto the street. “You’ll have the marketing guy say, ‘Could we do something like this?’ And the IT guy will say, ‘Absolutely not.’ Then the marketing guy will say, ‘Why not?’ And the IT guy will say, ‘Well, I guess we could if we changed the way we do a few things.’ Our goal is to show them what’s coming — what the technology is making not just possible, but inevitable. There’s always a reaction.”

Contact Bob Steele by email (


Sidebar: World of Ideas

The goal of the Merlin Center is to turn hard-boiled executives into wide-eyed children eager to explore and to ask questions. Here are a few of Merlin’s intellectual springboards.

Can you do something really new? Four displays in the center’s foyer showcase retailers that reinvented stagnant industries or invented entirely new retailing formats. They are Home Depot, IKEA, European cosmetics retailer Lush, and superstore Mars Music. “Mars captured the energy and the excitement of the music business,” says Merlin Center managing director Bob Steele. “If you’ve got a musical bone in your body, you can easily spend half a day there.”

What will your customers do? All of the Merlin Center’s banking environments are designed to give customers things to do that, no matter how frivolous they seem at first, serve as conversation starters for bank staffers. An interactive picture frame on the wall, for example, allows customers to select the kind of car that they’d like to buy and then study various financing options. “That lets a bank employee start a conversation by saying, ‘That BMW sure is a gorgeous car,’ instead of, ‘How can I help you?’ “

Do you make a perfect first impression? “For banks and for any other kind of retailer, the idea is to create the first perfect minute after the customer walks in the door,” Steele says. “Have a greeter at the door to direct them to the right place, or to answer a question, or just to leave them alone. That first perfect minute is what gives you the chance to have a second and third perfect minute with that customer — and to create a perfect experience.”