Banks keep pushing consumers toward online technology, but consumers aren’t ready to give up having a local retail branch an arm’s length away.
According to a Reuters article by Dan Freed, U.S. customers are not ready to give up regular visits to their nearest branches, which is complicating bank efforts to cut costs.
From the article:
U.S. banks have trimmed the number of branches by 6% since it peaked in 2009, according to Federal Deposit Insurance Corp data. The 93,283 branches open at the end of last year was the lowest level in a decade.
Yet analysts who have examined the data say banks should have done more to offset the pressure on revenue from low interest rates and regulatory demands.
However, the article explains that banks are getting different feedback from their borrowers.
“Our customers still want to visit us. They’re still coming to our stores and our ATMs at pretty consistent rates,” the article quoted Jonathan Velline, Wells Fargo’s head of ATM and store strategy, article saying.
The article gives examples of large banks, like JPMorgan, which is described below, which struggled to find a balance between pushing customers online and still have a place for them to physically go to for questions.
Executives at JPMorgan Chase, the country’s largest bank, say each branch earns about $1 million in annual profit, but takes a decade to reach its full potential.
The bank has shut 265 locations since 2013, roughly 5% of its network, but executives insist that branches remain essential for JPMorgan’s relationships with customers. They are the best way to sell clients many products and services ranging from mortgages to investment advice, according to Gordon Smith, JPMorgan’s head of consumer and community banking.