With few exceptions, white shoe banks just reported weak Q1 earnings. And it makes sense: Retail financial institutions are in the business of real estate, and it just doesn’t make great business sense anymore to maintain large networks of walk-in branches. The physical spaces are expensive to maintain, and with growing numbers of customers demanding online access to banking services and products, the idea of “going to the bank” appears on its way to becoming obsolete.
But although demand for physical bank branches is falling, it doesn’t necessarily mean that our children will never have the experience of personal, face-to-face contact with a consumer banking professional. Even with 24/7 access to accounts and services from any computer or mobile phone, many customers continue to require in-person support for advice, help navigating automated systems or making decisions about their finances.
Five senior banking industry professionals spoke recently on their firms’ quarterly conference calls about their plans for in-person service.
(All quotes courtesy of Seeking Alpha and lightly edited by Tradestreaming for clarity and space)
Bank America deploys digital ambassadors
Paul Donofrio, Chief Financial Officer at Bank of America
We now have nearly 20 million active users, and deposit transactions from mobile devices now represents 16% of deposit transactions… One way we are [adapting] is by deploying digital ambassadors in our financial centers. Digital ambassadors engage with customers who come to our branches to transact. They educate these customers on alternatives to branch banking which are not only more convenient for them but also less expensive for us.
JP Morgan tries on-demand staffing to ensure optimal service
Marianne Lake – Chief Financial Officer & Executive Vice President, JP Morgan
The head count in the Consumer Businesses is up slightly and that’s a combination of the investments we’re making in technology and digital. That’s about 500 of the heads, and the other 1,500 is increasing part-time staffing in the branches, so that we have flexibility to make sure that we have loading at the right times of day for making sure the customer experience is good.
Citi is reallocating human resources to service centers
Mike Corbat, CEO Citigroup
We also took a repositioning charge in Q1, as part of our effort to make share Citi is appropriately sized and structured for the current environment. We have identified opportunities for greater efficiencies in our regional models including additional delaying and shifting staff to our service centers, which now host more than half of our people. That will drive an additional reduction of headcount, which was down 3% during the quarter to 225,000, or almost 40,000 fewer than when I became CEO.
Wells Fargo thinks it needs more great people
John Stumpf – Chairman and CEO, Wells Fargo & Co
What we need is…more great people to serve more customers.
We want to make sure that we’ve got the right people in positions to do the right thing, where we become an employer of choice for a lots of those activities. Wells Fargo is a very nice place to work. We’ve got a great customer franchise who wouldn’t want to work here in those businesses compared to some of the places that they might be coming from and we’re always adding good people.
PNC is migrating customers away to non-branch channels
Bill Demchak – Chairman of the Board, President, Chief Executive Officer, PNC Financial Services
Within our retail bank, we saw good year-over-year and linked quarter growth in earnings and we continue to see improved efficiency within the business as we execute our ongoing strategy to reinvent the retail banking experience, with more customers migrating to non-branch channels for most of their transactions. [We also see] the expansion over universal branch model.