Whether it was transferring money through Zelle or depositing checks remotely or setting up new accounts entirely online, the pandemic accelerated the comfort level consumers had with digital banking.
“Banking, like every other business that stayed open, had to change on a dime,” said Jenifer Waller, president of the Colorado Bankers Association. “It was surprising how comfortable customers were banking without that in-person contact.”
That accelerated transition to digital, long predicted but slow in coming, has consumers and bankers alike realizing that physical branches may not be as necessary as they once thought, or that at the very least they should have a different look and feel.
“We want our customers to feel like this is a one-stop shop,” said Patrina Pettry, U.S. Bank’s Denver market leader for consumer & business banking, as she gave a tour of one of two new branches the Minneapolis-based bank recently opened in metro Denver.
U.S. Bank, like many of its competitors, was already looking to shrink its branch network before the pandemic. When its branches shut down last spring, the state’s third-largest bank decided to keep some closed — about 19 in metro Denver and another seven in other parts of the state.
But it isn’t abandoning new branches entirely and is opening up a new location in Denver’s Highlands neighborhood and one in Aurora’s Southlands neighborhood. It also plans to renovate many of its existing locations to better reflect a post-pandemic world.
The new storefront at 3480 W. 38th Ave., for example, is only 3,600 square feet, a fraction of the 11,500 square-foot branch it replaced after the block was razed to accommodate new development. There is no drive-thru and don’t look for teller booths, those are gone too. Souped-up ATMs, called interactive teller machines or ITMs, allow customers to customize the denominations they want to receive and access cash just by swiping their debit cards.
For those who prefer to deal with a human, consultants, who carry digital pads and are equipped to handle a variety of tasks, can take them into an office, stopping at an automated Starbucks coffee dispenser on the way. And when those consultants aren’t busy, they might jump on video chats from four terminals in the break room and help customers remotely.
Pettry said U.S. Bank is the first bank to have the ability to “cobrowse” in Denver. With opportune timing, the bank had developed the technology right before the pandemic. It allows branch employees to assist and coach customers through their online or mobile banking activities via a video chat.
“Customers will now call up and say can you cobrowse,” said Marisabel Cooley, manager of the Highlands branch. “They love it.”
The number of cobrowse sessions went from 500,000 last year to 2 million so far this year, she said. And for those happier with video conferencing, which went gangbusters during the pandemic, the bank also offers Webex. That can be helpful when a couple needs to complete a transaction, but one can’t make it in physically.
“The innovation is driven by what your customers need. They drive the decisions that we make as bankers,” Waller said.
As an added bonus, the new technologies improve efficiency, allow employees to take on more interesting assignments rather than staffing a teller line and long term could help bankers cope with labor shortages.
An unavoidable transition
Even after restrictions eased and people became more comfortable going out, transactions performed at branches are still down by 37.4%, said Kelly Kaminskas, president of retail and digital banking at Lakewood-based FirstBank, the state’s second-largest bank.
They averaged 6,242 transactions per month per branch in the eight months prior to the pandemic. In the first half of this year, the average is running closer to 3,907 transactions.
Although activity might recover a little more in the months ahead, Kaminskas said she doesn’t expect the foot traffic at FirstBank’s 113 branches will ever get back to what it was in 2019.
By contrast, she said the bank’s digital platform last month received somewhere between 8 million to 8.5 million visits.
“You will see a slowing down of the opening of new branches,” she said, adding the bank is also taking a serious look at where locations are really needed. It shut down a half dozen last year.
One reason for keeping branches around is to accommodate new customers. They may never show up again, but many people prefer to start a banking relationship in person. Before the pandemic, only one out of four bank accounts was opened remotely, but that share shot up to 60% last year, Kaminskas said.
“We saw people are willing to use that channel, with enhancements and innovations in the online new account process,” she said.
Unlike many of her competitors, Kaminskas said she hasn’t bought into revamping branch designs. The reason most people come into a branch is to make deposits or withdraw money, and many customers like to do that through a human teller.
“I might be the last hold out, but we aren’t planning a digital redesign of our branches,” she said.
But the bank is closely watching digital trends. Several years back, FirstBank pioneered video banking, Kaminskas said, but the technology was still challenging and it didn’t catch on with customers.
“The things we are focused on are how to better authenticate people online, how to make those digital experiences better and helping people through those digital experiences,” she said.
Rather than trying to get customers back into branches, banks are increasingly focused on trying to make them more comfortable doing business digitally, and that is becoming part of what happens at branches.
Wells Fargo, Colorado’s largest bank, saw an increase in activity from both existing mobile banking customers and from new ones, which it attributes to increased customer awareness of digital services and improvements in the user experience, said the bank’s regional spokesman Tony Timmons.
“While digital banking has been available for 25 years, these capabilities became an essential service for consumers during the pandemic,” he said, adding the pandemic sped up the adoption of things like mobile wallets and contactless payments.
PNC Bank, a new entrant to the Colorado market, took a tech-heavy approach when it opened its first “Solution Center” at 1590 Lawrence St. in April. The centers come with an ATM and banking kiosk that allows customers to handle many transactions on their own. If not, mobile consultants, equipped with tablets, can come to assist them in whatever space is available, similar to U.S. Bank.
PNC, which recently acquired BBVA USA, is looking at opening a second center at 7301 S. Santa Fe Drive in Littleton.
“We are seeing customers continue to count on access to our Solutions Centers, while increasingly taking advantage of our self-service and technology options that empower them to manage their finances with greater control and an unprecedented level of transparency,” said Ryan Beiser, PNC’s regional president for Colorado.
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