Photo by @Bank of America
After swiping my debit card to gain entry to Bank of America's newest branch downtown, I stepped inside, triggering a sensor that alerted a banker 1,000 miles away. The voice of Jackie Otto greeted me. Past a bank of three ATMs and two soundproof videoconferencing rooms stood a flat-screen television, beaming Otto's image from her office in Tampa, Fla.
"Welcome to Bank of America. How can I help you today?" she asks. It can be disorienting, a voice beckoning from across a long, narrow corridor. I assumed Otto was another of the automated voices that have grown ubiquitous, greeting us everywhere from Metra trains and airports to our own kitchens, on devices such as Amazon's Echo.
But there was Otto on the screen, an actual live human wearing a blazer, headset and a smile. She was looking right at me. Just off a video chat with a customer at a branch in Boston, Otto explained she can help customers secure a small-business loan, open a banking account, apply for a mortgage or sketch out a retirement plan. Should I need help with any of those things, she'd send me into one of the branch's two cushy private videoconferencing rooms and connect me with the right specialist, piped in from Tampa or Dallas-Fort Worth.
This tellerless Bank of America branch, which opened March 9, is the company's first in Chicago and one of about 15 nationwide. It's part of the banking titan's campaign to modernize its banks, its real estate footprint and the way it interacts with its increasingly digitally inclined customers. The Charlotte, N.C., company plans to open more than 500 branches over the next four years and redesign 1,500 others to add new technology and alter furnishings and layouts.
Not all of them will look like the location at Jackson Boulevard and Wacker Drive, which company officials describe as a pilot, but Bank of America wants to leverage technology to make branches more efficient, both to help it snip unnecessary costs and better connect with a changing customer. "This is not necessarily the banking center of the future; it's part of an overall strategy," says Sandy Pierce, a Bank of America senior vice president. "We view this as an additional channel where we're making ourselves more available to our customers and being able to reach them in ways that matter most to them."
While most customers who use Bank of America's new high-tech branch conduct their business at its increasingly capable ATMs and don't need to speak with a teller, the ability to connect with a person is a perk, Pierce says. "There's usually no waiting. You can literally walk right in, talk with our virtual concierge, swipe into a conferencing room and meet with a specialist on demand."
But it's also a benefit for Bank of America, which instead of staffing, say, 20 4,000-square-foot branches with 60 bankers, can operate 20 branches a third of that size spread across 20 cities with 20 bankers operating out of central offices somewhere else. The bank points out it is not doing away with its full-service financial centers and in fact plans to hire more than 5,000 employees within the next four years as part of an expansion.
Bank of America's new branches echo a trend happening across the country. Banks of all sizes are unveiling their own branches of the future. BMO Harris Bank opened its pilot version of a tellerless bank in Rogers Park that also uses video tellers. PNC Bank is tinkering with its branch model, axing teller lines and leveraging technology to cut costs. Chase has retrofitted a few dozen of its Chicago-area banks, which boast next-generation ATMs and bankers roaming the floor with tablets. Capital One's branch of the future involves creating co-working spaces where customers can sip espresso and use free Wi-Fi while bankers mingle and pitch the bank's products and services.
"Most big banks have their own 'bank of the future' model, and they're all trying it for the same reasons," says Christian Beaudoin, managing director of research at real estate services firm Jones Lang LaSalle in Chicago. "Customers still need some sort of in-person interaction, but you can still leverage a lot of technology to cut down on staff size and branch real estate costs."
Photo by Manuel Martinez Bank of America's
While Americans are using banks more than ever, they're increasingly doing so on a self-serve basis, via the web, mobile apps or ATMs, which collectively are able to handle the most common bank transactions—making deposits, paying bills and cashing checks. Accordingly, the number of bank branches is on the decline across the country, according to figures from the Federal Deposit Insurance Corp. In 2017, the net number of bank branches in the U.S. dropped 2.2 percent to 89,900, even as total deposits grew.
On top of that, they're shrinking in size and staff. The average bank branch in the U.S. is now 3,960 square feet, down from about 5,100 five years ago, Beaudoin says. Some brands are pursuing formats that occupy less than 1,000 square feet.
Full-service urban banks, in particular, aren't an efficient use of resources any longer, sitting virtually empty during off-peak work hours. As a larger percentage of banks' customer bases grows more comfortable with technology, traditional branches will continue to shutter, likely at a net pace of 1,500 to 1,700 per year, Beaudoin says.
That doesn't mean the physical bank is in danger of becoming obsolete. Customers still prefer to visit branches when they want to talk about a mortgage, small-business loan or identity theft, says Bob Meara, a senior analyst in the banking group at Atlanta-based consulting firm Celent. "When you ask consumers—even among millennials—nobody's talking about chat bots, visiting the bank's Facebook page or video chats with bankers. They still either want to pick up a phone or go into a branch."
Perhaps more important, more than 75 percent of new sales, customer accounts or loans are originated inside branches, he says. Still, like others, Meara expects banks to continue to experiment with smaller, thinner-staffed, more-connected locations. And more consumer transactions will continue to migrate to self-service environments, either at ATMs or from a mobile device or computer. Branches without any employees, however, are likely to remain a smaller percentage of locations, at least for now.
But as Jackie Otto told me on our video chat, she'd be happy to set me up with a specialist to refinance my mortgage. She said her computer showed him as available. From his office in Dallas.