Population Statistic: Read. React. Repeat.
Wednesday, August 09, 2021

One of the things that struck me when I moved to New York was the preponderance of banks on seemingly every corner. It seemed like I could walk a block without passing by a Bank of America or Chase sign, with a storefront ranging from a full-fledged branch to a kiosk of ATM machines.

It’s not just my imagination: Banking companies are bulking up on their branch presence in New York and other cities, seeing them as keys to growth:

The rush into retail banking reflects a fundamental shift by the industry. A decade ago, most big banks were shedding their branches, not building more. They steered their customers away from teller lines and encouraged them to use cash machines and telephone banking services, which were less expensive to operate. And many had grand visions of Internet banking, even if consumer-friendly technology had not yet arrived.

Today, there has been a serious change of mind. Banks view their branches as gold mines, not costs. Their checking accounts can generate a steady stream of fee income. Their tellers can sign customers up for new products, spurring overall sales. All the while, branches can collect millions in cheap deposits that can be lent out at higher rates. Even as they offer options like online banking and kiosks in convenience stores, banks still hope to lure customers inside a physical branch.

The upshot is that big banks are treating their branches more like traditional retail outlets than ever before. Bank of America’s New York regional manager is a former Barnes & Noble executive who talks about his “distribution network.” Commerce promotes its evening and weekend hours; Wells Fargo executives refer to their branches as stores. And across the industry, there is greater focus on branding, customer service and placing more products — from home equity to retirement savings accounts — into existing customers’ hands.

The retailing aspect of these branches is evident: As soon as you walk into a place, you see nothing but promotional materials and signage. This extends down to the automation: Chase has been pushing use of its ATMs by giving away free tickets to the U.S. Open on random transactions.

This harkens back to the old “free toaster with new accounts” strategies from decades ago (that also became zeitgeist punchlines when every single bank came to employ them). It’s interesting how the market approach has ebbed and flowed.

by Costa Tsiokos, Wed 08/09/2021 08:17:32 AM
Category: Business, New Yorkin' | Permalink |

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  1. BANKING BRANCH BACKLASH…

    I’ve made note of the proliferation of bank branches in New York City, both in terms of breadth and by their uneven distribution between rich and poor neighborhoods.
    The same mushrooming is taking place in other U.S. metros, and those two trends …

    Trackback by Population Statistic — 10/15/2007 @ 10:40:29 PM

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