Bank of America Is Slamming Branch Doors But Still Listening to Customers. How Can That Be?
Dec 28th 2013 2:23PM
Updated Dec 28th 2013 2:24PM
When it comes to closing bank branch locations, Bank of America has been the champ. Chief Executive Officer Brian Moynihan's cost-cutting initiative, Project New BAC, pledged to reduce the bank's bloated branch network by approximately 750 branches, and 2013 alone saw 300 branches sold. In fact, four of the biggest branch-trimming transactions this year involved B of A as the seller.
In a recent presentation at the Goldman Sachs Financial Services Conference, Moynihan noted that 700 branch locations have been sold, shrinking the bank's network from 6,100 to 5,400 branches. Going forward, however, there appears to be less emphasis on downsizing. Bank of America is listening to its customers, and figuring out how to optimize those branches for maximum sales as it uses those locations to deepen its relationship with its customers.
New "banking centers" do the heavy lifting
Moynihan noted some great improvements in the bank's mobile platform, remarking that 13 million checks were deposited through mobile channels during the third quarter. So far this year, the bank has increased its mobile customer base to 14 million, up from 11 million in 2012. Altogether, mobile, Internet, and ATM transactions have jumped 5% in the past year.
With those channels available to handle the everyday banking needs of its customers, Bank of America has been dressing up its branch locations to take on some heavy-duty customer service. Moynihan noted that new branch locations, or banking centers, are being manned by mortgage specialists, Financial Services Advisors and, in some locations, wealth and asset managers. Branches are becoming more like mini-banks, it seems, particularly in big cities like Boston, Massachusetts -- which sports a flagship 12,000 square-foot banking center that allowed B of A to close other, poorly performing branches in the immediate area.
Branches still matter
Bank of America isn't the only bank to realize that the branch experience is important, and it can be leveraged to increase customer engagement -- while leaving more mundane transactions to mobile, Internet, and ATM channels.
Fifth Third Bancorp recently announced that about one-third of its branches will be changed over to the self-service model, which will feature a couple of personal bankers in addition to the ability to conduct some automated transactions. Fifth Third recognizes the value of making branch locations available to customers, and knows the importance of having the bank's brand in a variety of locations.
Likewise, Wells Fargo has said that it will not be shutting down any branches in Bank of America's home state of South Carolina, opting instead to add new ATMs in various locations in the state. Wells has been experimenting with a new mini-branch format -- tiny, 1,000 square-foot sites that contain new ATMs, along with off-site tellers aiding customers via tablets and wireless phones. The bank has also been putting ATMs in grocery stores, college campuses, and apartment complexes.
Bank of America's strategy is paying off
As Moynihan pointed out, eight million customers visit branches each week, and making them happy is paramount. That's why Bank of America is still testing different types of branch styles to suit the location -- such as the megabranch in Boston, express locations in New York City, and interactive ATMs with live tellers that can assist customers outside of normal business hours in Jacksonville.
Bank of America is listening to its customers, and working harder to engage them -- and make them loyal. Already, the bank has increased auto lending 60% over the past year, and home equity loans have nearly doubled quarter over quarter. For a bank that has suffered the most reputational damage since the financial crisis, this new use of the bank branch system is a giant step in the right direction.
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The article Bank of America Is Slamming Branch Doors But Still Listening to Customers. How Can That Be? originally appeared on Fool.com.Fool contributor Amanda Alix has no position in any stocks mentioned. The Motley Fool recommends Bank of America and Wells Fargo. The Motley Fool owns shares of Bank of America, Fifth Third Bancorp, and Wells Fargo. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.