When banks and credit unions embark on a new branch project, whether a ground-up build, renovation, or in-store format, the stakes are high. Branches are multimillion-dollar investments that carry long-term implications for community engagement, customer and member experience, and operational growth.
In our latest Bits Matter Podcast, William Foley, co-founder of The Element Group, shared practical ways to reduce risk in large-scale branch projects. His advice for leaders comes down to three core principles:
- budgeting discipline,
- upfront planning, and
- choosing the right partner.
📊 Know before you budget. Our 2025 Design & Cost Catalog provides real-world cost estimates and timelines so you can budget accurately and avoid surprises. Download here.
Why Risk Mitigation Matters in Branch Design
According to FMI’s 2024 U.S. Construction Outlook, nonresidential construction costs have increased by more than 40% since 2019, with skilled labor shortages, tariffs, and supply chain volatility impacting timelines and budgets. For financial institutions, that reality makes careful risk mitigation more critical than ever.
It starts with full cost visibility. Successful projects account for every line item, from site preparation and millwork to graphics and digital integration, and they revisit those numbers multiple times throughout the design process. That way, there are no surprises when projects reach the boardroom.
To best support our clients, The Element Group maintains a database of branch project costs nationwide, allowing us to provide clients with accurate and current benchmarks at every stage.
Building a Smarter Budget
Risk mitigation starts with transparency with your design build partner:
- All costs on paper. From site preparation to millwork, furniture, graphics, and digital signage, a comprehensive budget is essential before projects are presented to the board for approval.
- Multiple budget checks. Revisit the budget at concept, schematic design, design development, and construction drawings. Each pass prevents sticker shock as details come into focus.
- Contingencies built in. Many CEOs wisely include a 5–20% contingency to avoid project delays caused by going back to the board for additional approvals.
This disciplined approach reduces the likelihood of surprises derailing timelines, a particularly important point given that the average delay on large construction projects now adds 20–30% to original schedules (McKinsey & Company).
The Human Factor: A Strong Partnership
Numbers are only part of the equation. Governance can make or break project momentum. Once a project begins, institutions should designate a single decision-maker with the authority to approve changes. Without that clear point of contact, projects can easily stall.
- Equally important is selecting the right design-build partner. Look for:
- Proven expertise in financial institution design-build projects
- A track record of listening to client needs, not just pushing their own ideas
- A genuine connection with your internal team
When expertise, listening, and alignment are all in place, projects run more smoothly and achieve the intended results.
Avoiding Costly Surprises
Even with careful planning, unexpected challenges are common. Leaders should anticipate:
- Permit and utility connection fees
- Premium labor for night or weekend work (often required to keep branches open during renovations)
- Unforeseen structural or mechanical conditions
The best defense is upfront due diligence: surveying existing conditions with tools like Matterport, reviewing planning and zoning calendars, and confirming municipal processes before design kicks off.
Why Pre-Budget Season Is the Right Time to Plan
Most institutions enter budget planning in September and October, making summer the ideal time to start gathering cost data and engaging a design-build partner.
And it’s not just about timing, it’s about accuracy. If your institution hasn’t built or renovated in the past 3–5 years, expect costs to feel significantly higher. In fact, branch construction costs have nearly doubled in the past five years. Engaging a partner early ensures you have up-to-date benchmarks and right-sized square footage before finalizing next year’s budget.
Key Takeaways for Leaders
- Plan early. Start due diligence and budgeting before entering board approval season.
- Expect the unexpected. Build in 5–20% contingency and anticipate permit fees, labor premiums, and structural surprises.
- Maintain discipline. Run multiple budget checks at every design milestone.
- Designate authority. Assign a single internal decision-maker to keep projects moving.
- Choose wisely. Select a partner who combines expertise with active listening and client alignment.
Branches remain a critical touchpoint for brand trust and customer and member service. But in today’s environment of rising costs and extended timelines, leaders who emphasize upfront planning, disciplined budgeting, and collaborative partnerships will position their institutions to deliver new branches on time and on budget, while avoiding costly surprises.
Transcript
Doug Ridley: Welcome to the Bits Matter Podcast. I’m your host, Doug Ridley, and today we’re continuing Season 2: A Strategic Approach to Branch Design with Episode 2: Risk Mitigation. In this episode, I’m joined by William Foley, co-founder of The Element Group and an expert in design-build projects for banks and credit unions. We dig into how you can reduce risk in large-scale branch projects, covering everything from budgeting and timelines to avoiding costly surprises.
Now, let’s get started.
William, let’s jump into risk mitigation. People don’t want to make a mistake here with such a large project. How are clients mitigating risks around budget and timeline during budget season?
William Foley: Well, I think they have to fully understand what it costs to design and build a facility, from the ground up, to a renovation, to an in-store, to an open renovation, and also partnering with a design-build firm that tracks the costs of projects throughout the country.
And that’s something that we do. We put all the costs into a database to help understand what things cost throughout the country, and then we can share that information with our clients and help them along the process.
Doug Ridley: Talk to me. When you say “all costs,” what does that entail?
William Foley: Well, that could go from site-to-site costs, general construction costs, millwork costs, signature elements, furniture, graphics, digital; everything that’s encompassed in designing and building a branch facility.
So we put all costs on paper. Sometimes clients might already have some of those, but we want a full budget. So when they go for approvals, they have everything they need.
Doug Ridley: And before we started recording, we were talking about how we run those costs multiple times on a project, not just at the planning stage, but at key points throughout.
William Foley: Those key points start with the concept. We’ll understand, at a high level, what the building’s going to cost so they can get approval. Then, when we get into schematic design, we’re understanding the floor plan and the elevations and will do another budget. During design development, when most of the branch is defined, besides the mechanical, structural, and electrical, we’ll do another budget.
The final test is during construction drawings, when everything is 100% well-defined.
So if something comes up during that process, we can make adjustments and stick to our original concept budget.
And one thing we’ve seen CEOs do, especially when presenting the budget to the board, is include contingency in the budget just in case something comes up. A lot of our clients will add 5, 10, or even 20% contingency, so they don’t have to go back to the board, because that could delay the project. The board only meets once a month, so they’d have to wait for board approval.
Doug Ridley: Nobody wants to go back and ask for more.
William Foley: Exactly.
Doug Ridley: One thing you’ve mentioned that we’ve learned over the years is how important it is to have a single point of contact. Someone who is there and has the authority to approve and move things forward.
William Foley: Correct. And like we talked about, it’s nice to have everyone involved early on in the project; the CEO, the facilities branch manager, and head of retail.
But once the project begins, there needs to be one point of contact with the authority to make approvals just to keep the project moving forward. They would work with the selected design-build firm’s main contact to move the project along smoothly and successfully.
Doug Ridley: When starting a project, selecting that partner is a big deal. What would you say to institutions looking for partners during budget season?
William Foley: Well, they definitely need to find someone with a connection. All design-build firms have great expertise and talent, but is there a connection between the internal team and the design-build firm? Do they listen to the client? That’s key. If you have expertise, listening, and a connection, you’re going to have a successful project.
Doug Ridley: Listening is so important. In my past life, clients would say they just don’t listen. I used to say, ideas hit the floor and nobody picked them up, and now my idea is lost.
William Foley: Yes, because a lot of firms want their ideas and concepts out there, but clients want you to understand their needs and listen.
Doug Ridley: Are there any surprise items that often pop up in a project? How does Element mitigate those?
William Foley: There are always surprises: unforeseen conditions in the existing structure or groundwork.
For new builds, the biggest thing is to do your due diligence upfront; survey the branch, review existing drawings and plans, and review details. Review building department issues, planning, and zoning. If you do all that upfront, you’ll have a successful project.
Doug Ridley: I hear our team talk a lot about planning and zoning, working with the town, making sure everything is aligned so there are no holdups.
William Foley: Yes, during a design critique, our project managers call the building department to understand their process. Are they taking the summer off? Will meetings be held during the summer? That’s critical because many times, the planning and zoning departments take a month off, which can bump a July meeting to August; a huge delay for a project.
Doug Ridley: It really comes down to experience and seeing around corners. Hey, we’ve been here before; here’s how we’ll plan accordingly.
William Foley: For open renovations, our team uses a Matterport plan of the entire space to understand all existing conditions. We look at the mechanical and electrical systems and identify any unforeseen conditions we can see without taking down walls. We do this upfront to keep the project on track.
Doug Ridley: Let’s talk about surprise items that often pop up and how we plan for them.
William Foley: Permit fees, unforeseen conditions within the existing structure, and premium hours for nights and weekends. Open renovations often require nights and weekends work to have the branch ready the next day. All these costs — permit fees, utility connection fees — have to be considered.
Doug Ridley: I assume those are listed as table stakes in our plan?
William Foley: Correct.
Doug Ridley: We’re talking a lot about upfront planning this season. Why is the summer budget season the right time to start planning for next year’s projects?
William Foley: Many banks and credit unions do their budget season in September and October. This is the time to gather information and work with a reputable design-build firm to understand what it costs today to build a financial institution. We guide them along the way.
Doug Ridley: When you say, “what it costs today,” is it because costs have increased? If a branch hasn’t been built or renovated in the past 3–5 years, you might have some sticker shock.
William Foley: It’s hard to believe, but in the past five years, costs have probably doubled. That’s why it’s so important to pick the right firm to help you understand the square footage you need; less square footage means less money and helps stick to your original budget.
Doug Ridley: William, thank you for joining us. Any parting thoughts for institutions as they start their 2026 budget planning season?
William Foley: Work with someone who has expertise in the design-build world. Have a realistic budget and timeline, and your project will be successful.
Doug Ridley: And that’s a wrap on this week’s episode. Thanks to William Foley for sharing ways to mitigate risk during your next project. If you’re planning for budget season and unsure where to begin, keep in mind that upfront planning isn’t solely about drawings and numbers.
It’s about early due diligence, ongoing budget checks, and choosing a design-build partner who truly listens.
A big thank you to our producer, Bryn Baldasaro, with music by the George Brown Band.
Be sure to subscribe and stay tuned for our next episode, where we’ll dive into the hidden costs you should watch out for during the planning phase. Thanks for listening, and we’ll see you next time.
