Magazine article American Banker

Fewer but Fancier: The New Branch

Magazine article American Banker

Fewer but Fancier: The New Branch

Article excerpt

Byline: Matthew Monks

They're spiffed up and souped up, and coming to an affluent area near you.

Meet the future of brick-and-mortar lending. Long rows of teller windows and imposing marble columns? Out. Private rooms, friendly greeters and bright open spaces? In.

Not every bank everywhere is opening new branches or making over old ones, and banks certainly aren't moving willy-nilly to re-do the branch system. But some that are committed to a new look - KeyCorp, Fifth Third Bancorp and M&T Bank Corp. among them - are working from designs that address a burgeoning problem: fewer people need to visit banks to do their day-to-day banking, thanks to the Internet.

As walk-in traffic declines, experts say, making customers feel as welcome as possible is central to post-recession growth plans at certain banks. Consumer research indicates that people still want to go to the bank from time to time to open up a new checking or investment account. But they don't need to wait in line to deposit Friday's paycheck.

"You want to design a branch so it is conducive to a quality conversation," said Robert A. DeAngelis, executive vice president and head of consumer banking with Cleveland's KeyCorp.

KeyCorp's branch network has a lot of the same problems shared by other sizable lenders that have grown by buying banks: a lot of its branches are older and don't match. KeyCorp has more than 1,000 of them in 14 states. Some date back to the early 1900s. Making over the entire network would be complicated and costly. So KeyCorp has been going about it selectively, refurbishing branches and opening new ones in high-growth markets like Seattle and in Colorado.

"We make sure we're doing [those things] in markets or new trade areas where there is new business volume," DeAngelis said.

Key opened 18 branches in the first six months of the year and has plans for another 22 by yearend. It expects to renovate 100 locations this year as well. The new locations are brighter and more efficient than old ones. They use technology that makes check processing simpler. Ads are displayed on video monitors, rather than wasteful paper displays.

Like KeyCorp, other banks that have been modestly investing in their branches are being selective about where to focus their efforts. Fifth Third, of Cincinnati, said it plans to open an undisclosed number of locations later this year, potentially in affluent markets like Chicago, Atlanta, or Orlando, Fla.

Raymond J. Webb, the head of Fifth Third's retail banking operations, said the company hasn't opened any branches so far this year, but will roll out its "customer-centric" offices in "high opportunity" growth markets. He said it's easier to sell a customer multiple products after winning their trust. …

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