Academic journal article ABA Banking Journal

Reaching out to Your Customers: Branches Real and Virtual

Academic journal article ABA Banking Journal

Reaching out to Your Customers: Branches Real and Virtual

Article excerpt

There's nothing as commonplace in banking as a branch. Yet even in this day of electronic banking and the Web, branches remain the best way to reach out to old and new customers alike for many banks. Indeed, as Exhibit 18 shows, nearly one-quarter of the banks surveyed said they had increased the number of branches they operate during 1998. Indeed, the larger the bank, the more likely a bank was to be expanding its branch network. Of the banks under $100 million, 17.1% said they increased their branches in 1998; of the banks between $101-$200 million, 29.5% increased their branches; and of the banks larger than $201 million, 41.7% had increased branches. Regionally, branching in 1998 was strongest in the Southwest (33.3%) and weakest in the Midwest (13.7%).

How extensively a bank branches depends somewhat on the branching law it has been subject to, as well as its orientation-retail versus commercial, for example.

Of course, manned branches need not necessarily be the traditional freestanding Greek temples nor a strip-mall box. Banks opt for all kinds of branching opportunities-one out of four banks surveyed favor nontraditional locations. As Exhibit 19 shows, nontraditional branching is dominated by supermarket locations, but there are significant efforts in additional markets as well.

Increasingly, however, electronic banking represents the way banks reach out to customers. …

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