Just as the Internet age was supposed to be the death of print
media, the advent of ATMs and online banking spelled the end of
traditional banks. The jury is still out on the fate of newspapers.
Brick-and-mortar branches, however, are surviving, say bank
executives, and they're being built as fast as ever.
Online banking holds the biggest market share on the banking
method used most often by consumers, according to the American
Banking Association. Across the country, consumers banked online 25
percent of the time in 2009. The second most common method was
visiting physical branches with 21 percent. Nearly 70 million
American households use online banking services, according to the
financial services technology firm Fiserv Inc. In 2007, that number
was 48 million, according to the Online Banking Report; in 2005, it
was 40 million; in 2000, 15.5 million; and in 1998, only 7 million
used the Internet. Forrester Research estimates 92 million, or 76
percent, of American households will bank online by 2011.
But even with the exponential increase in Internet banking, banks
are still breaking ground on traditional branches.
Arvest is one of the banks expanding its physical presence in
Oklahoma. The Arkansas-based bank had a building splurge in 2009,
adding two locations in Stillwater and one in Edmond, bringing its
total number of Oklahoma branches to 91. Although they did not build
at all this year, Arvest plans on 2011 being another major expansion
But this increase in brick-and-mortar locations comes in tandem
with a major increase in Arvest's online usage. Customers using
their website for their online banking needs jumped 9 percent from
2009 to 2010. Individual visits to the website increased 12 percent.
And users of Arvest's new mobile banking - for on-the-go banking on
smart phones and other portable devices - jumped 225 percent.
But Arvest doesn't consider this a paradox; the success of its
online programs does not equal losing customers from its physical
branches. Instead, the bank sees it as a completely different
"We're just adding additional households that we wouldn't have
had otherwise: younger groups who do all their banking online," said
Becky Franklin, executive vice president and sales manager for
Arvest in Oklahoma City. She remembers being told brick-and-mortar
branches were a thing of past, that online banking and ATMs were
going to come in and take over everything. "But we just haven't seen
that," she said.
This holds true statewide. Twenty-three institutions added one or
more branches in the state in 2009. In the five-year span from 2000
to 2004, 178 Federal Deposit Insurance Corp.-insured bank branches
were built in Oklahoma - an average of 35.6 per year, according to
the FDIC. From 2005 to 2009 - a span that saw more streamlined
websites, even larger numbers of consumers using online services and
the coming of online-only banking - brick-and-mortars increased even
more: There were 191 built, or 38.2 a year. The years 2006 and 2007
had an even higher spike, with 46 and 45 built respectively. (These
numbers do not take into account branches closed down.)
"It might look like various channels are becoming obsolete, but
we're not finding that. We're finding that clients are merging
channels one to another instead," said Jill Hall, senior vice
president and consumer branch delivery manager at Bank of Oklahoma. …