They say less is more — and it seems Bank of America is experimenting with just how literally it can take that as it is opening self service “robo-branches” which feature zero employees on hand.
Such automated banking centers are already on offer in Denver and Minneapolis, with 25 more slated to open in 2017. Consumers can walk in and use ATM banking functions — those looking to plan for retirement or seek an SMB loan are steered to a videoconference with a specialist in a dedicated room.
“I don’t believe analysts who say the branch is dead; that’s just lame,” says Charles Liu, head of branch transformation at the $2.2tn-in-assets lender, which is ranked third in the number of US branches after Wells Fargo and JPMorgan Chase. “But we’re at the forefront of trying to change the model. We have to evolve.”
Banks own a lot more branch real estate these days than they care to, as mobile devices are making consumers more self-service oriented. Across the nation, 6,008 of 95,018 branches shut their doors between 2008 and 2016, according to a study published last week by the National Community Reinvestment Coalition.
Those declines have not been uniform — Baltimore, Chicago, Philadelphia, Las Vegas and Detroit have been the cities worst hit. Rural areas have also been particularly squeezed as branch closures have created “banking deserts” (no banking centers within ten miles).
But while mobile has become consumers’ preferred channel over the last several years, bank branches remain the best channel for adding on new depositors. Simply getting rid of the branch is undesirable — which means BoA is not alone in trying to better innovate the branch into the digital age.
Capital One, for example, has opened 18 branches masquerading as coffee shops, where young “ambassadors” consult with customers over a cheap cup of Peet’s coffee. The bank also offers free in-store seminars (“how to talk money with your honey”) and demos to teach customers how to pay their credit card bills.
“Technology is not yet solving the fact that money is the number one source of stress,” says Lia Dean, head of the cafés business at the McLean, Virginia-based bank, which ranks 14th nationwide by branches.
Chase isn't offering caffeine as of yet — but is offering an environment that is as “engaging, modern and beautiful” as possible, so people “feel really successful” just walking in according to Erin Hill, head of consumer branch banking and wealth management. And Chase remains flexible on the future of its banking center fleet — making plans for both a future where it holds on, and a future where it lets the vast majority of them go.
It will depend on what it turns out consumes really want.
“The reality is, people weren’t going into branches for things they wanted to do. They were going to branches for things they had to do," notes Dean Nicolacakis, San Francisco-based co-leader of the FinTech practice at PwC.