The Customer Effect

Bank of America is testing employee-less branches to serve digital-first customers

  • Bank of America is testing employee-less branches to meet the needs of younger, digital-first customers who feel less loyal to specific bank branches.
  • Too quick a transition away from the traditional branch service model may alienate older customers and diminish brand recognition.
close

Email a Friend

Bank of America is testing employee-less branches to serve digital-first customers

The thought of going to a bank branch and chatting with an employee that knows a customer’s name and life history already feels antiquated, a scene right out of “It’s a Wonderful Life.” The final nail in that bygone era’s coffin is coming as banks adapt to younger customers – those who may choose to do their banking on their phone or interact with a non-human to manage their personal finances.

Enter the stripped-down, employee-less branch with just an ATM and a meeting room for video conferences with bank employees. The yet-to-be-named mini-branches are part of a Bank of America pilot program, with two located in Denver and one in Minneapolis. After a senior executive mentioned the concept at an investor conference last week, rumors proliferated as to whether this was a sign that the bank branch may be going the route of the bricks-and-mortar bookstore, the CD shop or the mall. The Washington Post even suggested bank branches may become what it calls “robo-banks” – automated and impersonal.

Bank of America’s mini-branches are about a quarter of the size of a traditional branch, said spokeswoman Anne Pace. Similar to an Apple Genius Bar, customers make an appointment through the bank’s mobile app. Once confirmed, the customer can take part in a videoconference meeting with a banking agent. To ensure everything goes smoothly, the bank deploys “digital ambassadors,” or customer service agents who answer customers’ questions about the technology. Pace said that the digital ambassador – a role that’s only been around for a year – is focused on making sure customers are comfortable with the technology and can use the mobile app.

Banks are evolving the way they deliver services to a mobile-first customer while continuing to build brand recognition – a tall order when customers are more open to using a range of products including upstart apps to manage their finances. Other banks are also experimenting with smaller, “smarter” branch terminals, including Citibank.

Bank of America said the mini-branch program is meant to test customer response, and is not linked to any plans to cut staff. SEC filings, however, show that the bank is trimming staff numbers as a whole – at the end of 2015, the bank had 11,000 less full-time employees than it did just one year before.

Still, analysts noted that the move towards smaller branches is about more than just reducing costs.

“It really is about saying ‘look, online and mobile banking are the two most widely and frequently used banking touch points,’” said Peter Wannemacher, senior analyst at Forrester. “That changes the role branches play in people’s financial lives – it’s about changing how you serve customers.”

Others in the industry warned that pivoting too quickly away from the traditional bank branch presented some risks for big banks, including the loss of some high-value older customers and diminished brand recognition.

“You don’t want to steer so far in that direction that you alienate the older generation,” said Raja Bose, svp of global advisory services for banking technology and ATM manufacturer Diebold Nixdorf. “As banks become more digital, they are actually almost undermining some of their key strengths – if the bank is truly digital, then it’s not very difficult for you to switch banks or start using PayPal or blah-blah-blah-bank-dot-com.”

 

0 comments on “Bank of America is testing employee-less branches to serve digital-first customers”

The Customer Effect

Citizens Bank’s Beth Johnson: ‘Personal interaction remains important to customers’

  • What bank clients expect from their institutions is changing, according a new Bank Experience Survey.
  • Citizens Bank CXO Beth Johnson joins us to discuss the findings of the research and how it's impacting banking today and in the future.
Zachary Miller | August 11, 2020
The Customer Effect

With deposit volume growing 705% in April, MANTL raises $19 million

  • MANTL, which helps banks open digital accounts, has experienced strong growth during the pandemic.
  • The company is also announcing an additional fundraising.
Zachary Miller | July 16, 2020
The Customer Effect

Now under the Linux Foundation, the Fintech Open Source Foundation wants to accelerate software development across financial services

  • FINOS runs 11 programs driven by more than 30 financial services organizations and technology members.
  • Aligning with Linux, the group will have more resources and reach to encourage open source software development.
Zoe Murphy | April 28, 2020
The Customer Effect

Americans carry more debt and turn to mobile banking in the face of the pandemic

  • Americans turn to digital solutions as they hunker down in the face of COVID-19.
  • They're responding by increasing emergency funds and not paying down credit card debt.
Michael Deleon | April 06, 2020
The Customer Effect

DriveWealth’s John Shammas: ‘We’re accessing the uninvested population around the world’

  • Fintechs are increasingly offering new forms of investment offerings.
  • Many of those investment offerings are powered by DriveWealth.
Zack Miller | December 20, 2019
More Articles