What will the bank of the future look like? Will it be smaller than today’s branches or employ less people? Will it even exist as a physical structure? Banking executives are forced to ask such questions as technology improves at an almost exponential rate and customers continue to demand the most up-to-date services.
Virtually all banks and credit unions have websites and offer online banking for home convenience. Most also already offer mobile banking from smartphones, including check-cashing features called remote deposit-capture technology. As increasing numbers of customers choose these options, how will it impact brick-and-mortar branches?
According to the Federal Deposit Insurance Corp., 240 bank branches were closed in 2009, the first net decrease since 1995. In 2010, 1,112 were closed and another 232 net closures in 2011.
Bank of America Corp. hopes to close 200 branches and eliminate 16,000 jobs by December 2012. The bank had 275,460 employees at the end June.
In September, American Banking Magazine reported executives from Midwestern banks, including PNC Financial Services Group of Pittsburgh and KeyCorp in Cleveland, said they have too many branches. KeyCorp’s goal is to close 5 percent of its 1,062 locations by December. At PNC, 1,500 automated-teller machines complete with check-scanning technology are scheduled to be in place by year’s end.
The new technology is replacing tellers at many locations but is also expected to improve profits.
James C. Smith is the chairman and CEO of Webster Financial Corp., parent company of Webster Bank of Waterbury, Conn. He views the technological changes as a means to growth for both the banks and their employees.
“One of the great things about technology is that it creates more opportunity for people to have a higher level of responsibility and more meaningful career opportunities,” he said.
He also believes the roles many employees currently play will change over time. “One of the things we have talked about is something we call the universal banker where, in the past, the branches would operate in silos; the tellers would be handling the transactions, the platform people opening accounts while others are doing customer cultivation,” he said. “As the technology advances, transactions will be done electronically or by a mobile means. That gives us the opportunity to develop all of our branch personnel to customer-advisory positions; one benefits the other.”