Friday, September 14, 2007

Branching Out: Branch banks making a comeback?

Since the advent of the ATM machine and online banking, I've spent relatively little time in banks. Pretty much my sole up close and personal encounters with retail banking are when I buy foreign currency (approximately once each year), and when I stop into the neighborhood branch bank - hopefully with one of my nieces in tow - to make a deposit into the joint fund that we're building towards our 2009 Paris Adventure.

Thus, I was surprised to see an article in an Economist a while back("Branching Out", June 16th), that detailed a number of indications that branch banking is, perhaps, coming back.

The branches described are not your father's little passbook savings outfits.

Umpqua, a bank in the Western states, has comfy branches with employees trained in customer courtesies by the Ritz Carlton. Umpqua sells books and music, runs yoga classes, and offers a chocolate with your bank receipt. Yesterday's tellers - now rebranded as "universal associates" are comped on sales of financial services and non-financial stuff.

BBVA, a Spanish bank profiled, sells cars, houses, health care - giving new meaning to the term "full service banking." BBVA also has a clever little activity going in some of its branches. During the afternoon siesta hours when most banks are closed, some BBVA branches are open for business, providing a range of (mostly free?) services to immigrants. They're hoping that the immigrants will grow into loyal, profitable customers. In the meantime, not wanting the raise objections among their traditional Spanish clientele - who might be a little miffed at the thought of such catering to immigrants (and those of us living in the U.S. know just how miffy that can be) - the banks hide this all away by discreetly closing a curtain on this midafternoon activity.

Obviously, the branch banks are trying to create stickiness by offering a lot of services, and , of course, by offering services that can command a premium price in an era that's categorized by such ubiquitous race to the bottom pricing that you almost expect that consumers will start demanding less-than-zero prices for the pure privilege of doing business with you.

I have noticed a few new branches popping up around downtown Boston, including a nice bright new Citi branch not far from where I live.

Despite the shiny newness, I have no plans for increasing my level of branch banking activity.

For now, I'll stick to the occasional deposit to the Paris account. Unfortunately, my bank doesn't offer the nice little passbooks of yore (which almost, but not quite, looked like smaller versions of your passport). Instead of that nice, satisfying deposit stamped on the passbook, I get a receipt.

I save them in a folder and am happy to report that, with nearly two years left to go, we almost but not quite have enough.

1 comment:

John said...

It's also interesting to see how the branches run. I occasionally have to go to a local Washington Mutual branch, and they've rethought the whole experience; instead of the dreaded line in front a row of tellers, you enter and are greeted by someone who figures out who you need to talk to (regular teller, or perhaps someone who can handle more complicated stuff) and you are sent off to a little pod-like station for your transaction. I don't know if it faster, but it feels faster.

Another interesting thing: the whole you & teller on opposite sides of big counter feeling is gone; you're both standing by a workstation. And, the teller has no cash. If you are getting cash, you're handed a little card that you stick into the ATM on the way out to get your money.

That last may be because there's no big secure counter blocking people from money. It also may be because I've only gone to branches near my home, which means they are in urban areas that are getting revitalized (& thus still have some crime/safety issues.

The whole thing feels more like going to a boutique store than a bank, though. And I congratulate them on opening shiny new branches in areas of the city that don't have a ton of banks. If their online banking wasn't a bit lame compared to BoA I'd move my personal accounts there.

Another branch banking note: i have some accounts with ING Direct, and have gotten some mail from them making a big deal about their new "banking center" in Houston. So what I signed up for as an entirely online bank now has a local physical presence.