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Thursday, Mar 28, 2024

Banks Get Cozy, Boost Local Services

Banks Get Cozy, Boost Local Services By SHELLY GARCIA Senior Reporter Used to be a walk inside the bank branch got you a 20-minute wait for a cold stare from an anonymous teller who might just send you packing after reciting the rules about transactions that can only be conducted at your home branch. But anyone bypassing the ATM machine for a visit behind the doors of a bank branch these days is more likely to get a warm hello, a cup of joe and a conversation that takes place face-to-face no shouting through bullet-proof glass required. The disappearance of community banks, stock market declines over the past several years, the bust in the business economy coupled with a boom in consumer spending has sent most banks running straight for the retail customer, a segment that many had shunned since the 1990s when the nation’s largest banks beat a frenzied path to automate their retail banking services. “It’s the reversal of a trend where banks were focusing on technology so customers don’t have to come into the branch,” said Tracey Mills, a spokeswoman for the American Bankers Association, a Washington, D.C.,based trade group. “Community banks have always been really good at the customer service thing and getting to know their customers, and larger banks are noticing customers respond to that, so they’re competing by putting banks in communities and trying to focus on customer service.” In the San Fernando Valley, where there are less than a handful of independent community banks remaining, some of the largest players in the banking industry have opened new branches, remodeled old ones and added staff in an effort to attract retail customers. A new look “We’ve remodeled 80 percent of our branches in the San Fernando Valley, but we have also upgraded the quality and caliber of our team members,” said Vince Liuzzi, president of community banking in the San Fernando Valley for Wells Fargo Bank. “We have determined our customers want to bank when, where and how they want. So in response we have put business bankers, financial planners licensed insurance representatives in the branches.” Wells Fargo, which operates 27 branches within its Valley division, which stretches from Toluca Lake to Calabasas and up to the 118 Freeway, is set to open two new branches in the area within the coming year, in part because the company has added to its staff here by about 30 percent. Washington Mutual, which last month announced that it would add about 250 new branches across the country this year, is also expanding in the local area, although the company could not break out the number of new branches it planned in the Valley as yet. WaMu has opened 56 branches in the greater San Fernando Valley, an area that also includes the Simi, Conejo, Santa Clarita and Antelope valleys, since it entered the California market in 1996. “In the late 1990s we took a really hard look at how the branch bank services the needs of our customer base, and we saw a lot of banks were pushing customers into less costly means of servicing,” said Kendall Bateman, senior vice president for planning and franchise development for WaMu. “What we found was that our customers want to do business with friendly, competent people in a comfortable environment. Based on that, we began our expansion into a number of different markets.” The consolidations of the 1990s helped banks to locate branches in local communities throughout the country. But as the merger frenzy subsided there were 239 deals last year compared to 504 M & A; transactions in 1998, according to data from research group SNL Financial banks began identifying voids in the market and began building new branches to fill them. “When you have this mass consolidation, there’s a lot of thought that people can come in and feast on the remnants,” said John McCune, research manager for the financial institutions group at Charlottesville, Va.-based SNL. “One would normally think it’s an opportunity for community banks. What we’ve seen is some of these regional banks that are consumer savvy making a play for these customers.” A prime target The Valley is considered by some a particularly appetizing feeding ground because of its large population and because there are areas that simply are underserved in the community. Even commercial banks have moved to establish a presence here. American Business Bank, which launched in L.A. in 1998, late last year opened a Valley office in Warner Center staffed with two relationship managers, Regional Vice President Gary Coleman and Vice President Ron Call, both residents of Calabasas. “We think of it as a city almost the size of Dallas that we would be remiss if we didn’t have a local presence with people who work out there and live out there,” said Don Johnson, president and CEO of American Business Bank. “The mergers helped us, but that’s just kind of a backdrop to the fact that it’s just an ideal place to do business.” For the retail banking segment too, there have been other reasons besides the bank mergers and consolidations to expand. Chief among them has been the strength of consumers’ buying power and a decided turn away from using brokerage houses for investment services, largely as a result of the stock market bust at the beginning of the decade. “What our customers told us is that as opposed to using an online brokerage house they prefer to sit across a desk from a financial consultant and talk about their portfolio,” said Liuzzi. Banks like Wells Fargo, which this year plans to add some 25 branches in Los Angeles and hire as many as 400 new workers to staff them as part of a 100-branch expansion nationwide, say a large part of the reason for the expansion is the addition of services in recent years. Expanded services Besides traditional retail banking transactions, most banks now offer financial planning services, trust and insurance services, along with a full menu of home mortgage, home equity and other loan products. The added staffing helps not only to secure these new businesses but also to cross sell products to existing customers. “We consider ourselves a financial institution and because customers are moving more of their relationships to us, when you bring your mortgage over and your trust accounts over, we have to make sure we have a specialty banker for each of those products,” Liuzzi said. And because these added services typically take more time than the traditional banking transaction, banks have also had to revisit the design of their branches so that they invite more lengthy visits. Across the country, some banks have installed fireplaces and lounge areas, plasma TV screens and ticker tapes flashing stock market information. There are even partnerships brewing with Starbucks, said American Bankers’ Mills. WaMu, considered a leader in retail banking, has developed a new prototype branch the bank calls Occasio, that eschews the traditional bank design in favor of a concept that borrows from the retail and hotel industry. Visitors are greeted by a khaki-clad concierge and directed to a central counter where they can interact with bank employees without lines and teller windows. And there is a kids area equipped with video games. “A lot of our competitors were focused on corporate business and high net worth individuals and they lost sight of the consumer,” said WaMu’s Bateman. “We have always been a retailer for consumers, so we maintained our customers, and some of that commercial business has gotten a lot less lucrative, and it’s caused some of our competitors to reexamine their position, and they’ve rediscovered the value of branch banking.”

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