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Coffee, sculptures and financial consultancy. Banks try to make new branches less intimidating
NEW YORK (AP) — It’s like Sephora or Starbucks now offers a checking account.
After years of closing or neglecting physical bank branches across the U.S., the nation’s largest banks are spending hundreds of millions of dollars renovating old locations or building new ones and, in the process, changing the look, functionality and purpose of the branch. local bank. .
Many of these branches are larger, airier, and designed to be more comfortable for those arriving with difficult financial questions. Others are being designed as “third spaces” to allow local nonprofits or community representatives to hold workshops or seminars for clients or neighbors. They contrast with the marble-clad temples to finance built 50 or 75 years ago and the obsolete branches that more recently crowded suburban shopping malls.
“Walking into a branch can be intimidating. Now we’re creating these spaces so everyone can feel welcome,” said Diedra Porché, head of community and business development for consumer banking at JPMorgan Chase & Co.
Porche leads a team of 150 employees who work in what JPMorgan now calls “community centers,” which are larger branches that have areas for nonprofits to make presentations to local residents and lead workshops for those seeking advice. The most recent of these community centers opened in the Bronx in April, attended by New York state and local politicians, as well as JPMorgan Chairman and CEO Jamie Dimon.
JPMorgan is not alone in creating branches that are less focused on sales and more on consulting. Capital One opened its latest “cafe” in Union Square in May, a space that serves coffee and baked goods and allows anyone, Capital One customer or not, to sit inside the café and work and do networking.
“Banking shouldn’t be that experience of someone sitting in a suit behind a desk talking about your loan application, but it should be someone sitting with you, offering to help you with these questions about money and finances,” said Jennifer Windbeck. , head of retail banking channels and operations at Capital One.
Banks like JPMorgan Chase, Bank of America and Wells Fargo have been closing branches steadily since the 2008 financial crisis. They saw little need for their networks of thousands of physical locations when fewer Americans regularly walked into a branch for banking needs. routine and ATMs largely replaced tellers. In the remaining branches, customers often noticed threadbare carpeting and worn furniture and office cubicles.
It seemed like the bank branch’s fate was sealed when technological gains during the pandemic made it possible to buy a house or a car without physically interacting with another human being. The U.S. banking industry is estimated to have closed about 4,000 branches since 2020, according to the National Community Reinvestment Coalition.
Policymakers and community advocates criticized the industry for closing so many branches after the financial crisis, especially branches located in low-income neighborhoods where financial services were often limited to check cashing stores, pawn shops, and dollar stores. assigned loans.
“When bank branches close, there are several adverse effects on the surrounding community. Small business loans and activity in the area decline. More people use alternative financial services that expose them to unregulated and predatory financial practices. An important commercial tenant and employer has been lost,” NCRC researchers wrote in a 2020 report on bank branch closings.
Local bank branches are so important that even Congress got involved in the issue during the Civil Rights Era, passing the Community Reinvestment Act, a law partially designed to ensure that banks had branches in poor neighborhoods the same way they did in suburban rich.
The trend of branch closures may be reversing or at least slowing down. Chase is adding new branches, while Bank of America has significantly reduced its rate of branch closures. Other big banks, like Capital One and Wells Fargo, are also slowly adding branches. Banks are finding new uses for their branches, often in unexpected ways.
Despite the spread of digital banking, bankers and community groups still emphasize that physical branches are a necessity. Industry and independent surveys have shown that Americans still want to go into branch when it comes to big financial issues, such as buying a home or car, preparing for retirement, dealing with the financial impacts of marriage or divorce, or having a new child.
Some banks are even building new branches in unique locations that don’t initially scream “this should be a bank”.
Bank of America, for example, hired Rebekah Sigfrids from Sephora and Victoria’s Secret as its first in-house branch designer, rather than using traditional third-party service providers.
An example of Sigfrids’ work is a Bank of America branch opened in Williamsburg, Brooklyn, which was previously used as a sculptor’s studio. The clean and airy branch features sculptures by the artist who was previously in the space, as well as other works of art from the neighborhood.
“Now we’re really thinking ‘how can we fit this branch into the community?’ Bank of America had its own look, but what about when we go to Williamsburg? What if you’re in midtown Manhattan, or Seattle, or what if you’re in Texas?
JPMorgan Chase has opened nearly 20 of what it now calls “community centers.” These are larger branches located in low- and moderate-income neighborhoods designed to provide more comprehensive services to typically low-income Chase customers.
Chase builds these centers with multipurpose areas to allow nonprofit organizations or Chase employees, known as community managers, to conduct financial education workshops or seminars for the community. Chase employees are specifically instructed not to talk about Chase products as part of these workshops in order to provide higher levels of trust, Porché said.
“We wanted to marry all the traditional needs of a branch, but expand that space so clients could also get financial workshop and programming. These (new branches) should be an anchor for the community,” she said.