The Customer Effect
Chase is rolling out advice-driven ‘Express’ branches next month
- Millennials prefer to have conversations about long term financial goals, so Chase is transforming previously transactional branches into dedicated spaces for advice
- Banks may start bringing wealth management into the retail strategy with the younger generation customers, who will be the recipients of Baby Boomers’ funds
Chase is piloting a new branch format designed to help customers with routine banking transactions, like withdrawals and deposits. Next month, the largest U.S. bank by assets will roll out six “Everyday Express” branches each in New York City and Culver City, California with a Digital Advice Bar to help customers learn how to engage with Chase digital products and video conferencing to connect customers with companion branch bankers for more complex matters. The idea is the branches will be smaller and offer simpler services like account openings. For more complex things like a home loan, customers would have to videoconference with a banker, or just go to a regular branch. The digital advice bar has a number of iPads set up that show the Chase mobile site, said Erich Timmerman, a spokesperson for the bank. Bankers can help show customers how to use the site to make money transfers using QuickPay with Zelle, pay credit cards and other bills. Consumers and business customers will still be able to open joint and individual checking, savings and credit card accounts as well as complete transactions at ATMs. Branches have been consolidating locations with lower servicing volume, opening in higher growth areas and renovating existing branches and ATMs. More importantly, they’re evolving into more compact, digitally oriented spaces that incorporate new technology and help branch employees focus on improving the customer experience. “Chase more than any of the large banks has made significant investment in expansion of physical capacity in key markets around the country,” said Steven Reider, founder and president of the marketing and branch-planning adviser Bancography. “Chase is distinct from any of its top 10 peers in terms of its willingness to enter a new market and expand branch networks aggressively." Four out of every five monetary transactions are completed through self-service channels. Last year more than 400 million transactions were completed with tellers, 70 percent of which could have been done through our self-service channel, Thasunda Duckett, JPMorgan Chase’s consumer banking CEO, said at the company’s last Investor Day. “There’s a continuum from a small community bank that’s 100 percent branch dependent to an Ally that’s 100 percent online,” Reider said. “Chase is farther in terms of the balance of the concessions toward the physical.” In October Chase promoted Pam Codispoti, who oversaw the creation and rollout of the Chase Sapphire Reserve card that became a cultural phenomenon amongst millennials, to head of branch banking and wealth management. Her challenge now is to change millennial customers’ perceptions of branch banking as she did with credit cards. Recognizing that millennials prefer to have conversions about long term financial goals like saving for retirement or buying their first homes, Codispoti envisions Chase branches transforming into dedicated spaces for advice similar to Apple stores’ Genius Bars. Like many of its peers, Chase wants to strip out the labor side of transaction processing and funnel as much of that as possible to low cost channels like ATMs. Historically, financial advice, planning and wealth management products and services weren’t designated as things to do in-branch, but there’s a lot of benefit to bringing those capabilities to the forefront of branches. “There’s an aging society, the baby boomers who are approaching or at retirement,” said Steven Reider, founder and president of the marketing and branch-planning adviser Bancography. “Financial institutions see and appropriately fear the loss of those funds and that the parent generation passes away” and need to confront how they’ll keep those funds on the books. That’s why it’s likely banks will take initiatives from the wealth management department and stick them into the retail strategy with the younger generation customers, who will be the recipients of Boomers’ funds. Most banks have been able do that with “circuit riders,” people who are assigned a portfolio of six to eight branches to oversee for their line of business. “A customer comes in and says ‘I want to talk about retirement planning’ and the bank may say ‘Our officer isn't here but we can video with her right now or we can set up an appointment for you to go see her.’” The six pilot branches aren’t necessarily smaller in square foot; they’ll be the same size as Chase’s other branches and staffed with two to four bankers. If the pilot is successful, new future Everyday Express branches could be designed smaller, Timmerman said. Chase doesn’t have a timeline for its potential expansion yet and will focus on learning about how customers respond to the new spaces.