Banks are hoping that better designs will encourage people to visit their flagship branches. Photo: CFP

Walking into the US-based Umpqua Bank, customers are greeted by a ladder, buckets of paint and a pile of brushes. This implies that the bank's mortgage services will allow you to not only buy a house but also to decorate and furnish your new home. This effect impresses customers by differing from the traditional image of a bank.

While the idea of a flagship branch is changing old ideas about banks in the West, in China the general impression of a bank is still the old stereotype of a cold, distant service with an inhospitable atmosphere that hardly makes one feel at ease. The idea of providing a better customer experience via a flagship branch is still beyond the reach of many domestic banks.

However, domestic banks have begun to focus more and more on differentiating themselves from their competitors by providing impressive and more hospitable experiences.

In March 2014, China CITIC Bank officially opened its first flagship store in Guangzhou, Guangdong Province. It represents a breakthrough in traditional banking services, as they have successfully made the bank's environment and services more hospitality orientated.

CITIC Bank's new flagship store is more like a living room than a bank. With richly painted walls, beautiful interior decor and warm lighting, the store attempts to create a relaxed atmosphere for customers while they are waiting for their services.

The designers behind the new flagship store are Continuum, an international company that provides global innovation and design consultancy. Recommended by CITIC Bank's second largest shareholders, Banco Bilbao Vizcaya Argentaria (BBVA), a multinational Spanish banking group, CITIC Bank's flagship store has made some bold changes to how it delivers its services.

In 2008, BBVA approached Continuum for an idea of what a bank would look like in 2020. What makes Continuum especially suited to this task is that they not only provide interior design ideas for banks but also to clients in the hospitality industry, such as restaurants.

After this, the flagship branch was completely renovated. One big change was the redistribution of space. The staff area decreased from 65 percent to only 40 percent of the total area. This increased the space dedicated to customers and provided them with a more comfortable experience.

When VIP clients are waiting for services, they can be brought on a tour of the special service and non-banking service areas where they can read books and get refreshments. Meanwhile, interactive touch screens allow them to get to know all the bank's services. If they need any extra assistance, they can press a button on the screen and the lobby manager will be right over to help.

The Guangzhou flagship branch is just the first step towards more hospitable banking. According to Deputy President of CITIC Bank, Sun Deshun, all of the bank's regions will have at least one flagship branch opening in the next three years, and the major regions like Beijing and Shanghai will have many of these kinds of locations.

Following CITIC Bank, Ping An Bank also opened its first flagship branch. But instead of focusing on hospitality, they focused on improving the banking experience by using technology. For example, instead of filling in paper forms, customers type in their service requests via computer with the assistance of staff, which is not only more efficient but also makes customers feel more personally involved in their banking.

Analysts predict that, facing increasing pressure from online banking, domestic banks have started pinning their hopes on these flagship stores to improve the experiences of customers, the First Financial Daily reported in April 2014.