| WHAT'S THE FUTURE OF THE BRANCH? |
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The Headache: Branches can be an expensive way to deliver customer service. Yet they are a traditional channel and one that many customers still want to use. Our Question: What do you think the future of the American bank branch will be? What's going on at your bank? Come see what other bankers think, and add your own views
Are bank branches essential, evolving, obsolete, or morphing?
Let's hear your views and ideas below! (Editorial Note: Contributions to Pass the Aspirin may also appear in our print edition. While we will ask for your e-mail address, this is only as an aid to verifying identity and will not be used for any marketing or promotional purpose. The e-mail address will not be published.) To suggest new topics for Pass the Aspirin both in print and in this blog, please e-mail This e-mail address is being protected from spam bots, you need JavaScript enabled to view it Set as favorite Bookmark
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Ken Burgess, president and CEO, FirstCapital Bank of Texas, N.A., $451.9 million-assets, Midland, Texas
said:
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We spent time this last year in our strategic planning process tightening down our focus on sticking to our niche. We are primarily a commercial bank. We have had the tendency over the last few years to forget that, and to do things outside our niche. One of these distracting things was to add more brick and mortar branches to our system. We have determined that branches are needed more for banks with a retail focus and less by banks that focus primarily on business. As a result of our niche and our larger-than-necessary branch network, we are having a hard time driving the volumes necessary to justify our branches. Branches are not profitable or not profitable enough to justify their existence. To address this issue, we are beginning to place commercial lending officers and support staff in each of our branches to attract more business to each of the branches. Our commercial lending efforts generally drive our growth and our experimentation with this approach has proven successful. To address the need for convenience, which many of our retail and some of our commercial customers request, we are exploring the deployment of newer full- service ATMs and new technology which allows for automated branch locations. The cost in these types of locations will be fixed asset, technology, and communications cost primarily. The biggest cost of most branches is people, and that cost would be eliminated using this approach. The automated branches would allow us to use underutilized people we already have in other locations, due to the remote control operation of the new branches. We are currently performing our technology study and when that is complete, we will begin a location study. |
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Keith Pollek, president and CEO, Fox River State Bank, $102.3 million-assets, Burlington, Wis.
said:
| We are a single-facility bank. The only change has been to remove the customer access computer in the lobby, due to lack of use by clients. Blackberries and iPhones have given customers the internet access without having to stop at the bank to use a computer. | |
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Ed OLeary, banking consultant and ABA BJ blogger, Talking Credit
said:
| Ken Burggess' comments are particularly interesting in that larger banks in recent years have been converting commercial lending into a retail product (i.e., delivered through the branch net work). This tends to foster the use of scoring systems and other ways of taking much of the analytical component out of close contact with the customer. In the long run, I think that smaller commercial borrowers of community banks will be the losers. With no regular access to and interaction with experienced lenders, customers will lose a friend and advocate. Lending is a very personal activity. I hope First Capital's model works particularly for the long term benefit of its customers. | |
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