Delaware generally avoids nationwide trend of branch closings
Capital One Financial Corp. recently made news when it told regulators that it plans to close 37 branches around the country, an 8% decrease from the 474 offices that it had at the end of 2019 and a substantial decrease from the 702 branches it had in 2016.
Branch consolidations are an increasingly common occurrence among financial institutions. Many large banks have closed or consolidated branches in recent years, citing a shift toward mobile and digital capabilities in response to customers’ changing preferences. In Delaware, however, the total number of Delaware bank branches remained stable between June 2017 and June 2019, according to FDIC data that includes the single offices of commercial banks that call Delaware home and take deposits from institutional and credit card customers.
JPMorgan Chase plans to have seven new full-service branches in Delaware by the end of 2020, including three that opened in recent months.
“We have more than 11,000 employees in Delaware, so we see an opportunity,” said Arnold Johnson, Chase market director for banking in Delaware and southern New Jersey. “We’re investing in them because customers still use them. Seventy percent of our new deposits come from our branches.”
Johnson said Chase has redesigned the interior of its branches to create what he calls a “living-room approach” with full digital capability.
“We’ve heavily invested in technology,” he said. “We now have 52 million digital customers, up 12% from last year, and 74% of our consumer banking customers are digitally active. Our goal is to customize the branch to make sure it represents what we’re trying to do in the community.”
M&T Bank has invested more than $11 million “refreshing” its 37 branches in Delaware and nine on the Eastern Shore since late 2018, looking for ways to create a more intimate space, according to Delaware Retail Market Manager Brian Nourie. M&T has reduced the height of teller stations, redesigned ATMs, and sought ways to integrate its products – including those offered by Wilmington Trust investment bankers – into the overall customer experience.
Nourie said M&T’s strategy is to assess how its customers bank, spend in Delaware on physical infrastructure, and work with the branch staff to have “digital conversations,” walking customers through alternative ways they could do a transaction if they didn’t want to come in.
The reason for the heightened branch focus? About 83% of M&T’s customers walk into a branch over a 12-month period, he said.
“We are always evaluating client experience,” said M&T Bank Delaware Regional President Nick Lambrow. “What we’ve focused on is branch managers developing small business in their markets. We made that a commitment in Delaware.”
Nourie agreed, explaining that the 6% decrease in transaction volume that M&T has seen allows branch managers to double back and spend more time
in their communities.
WSFS Financial Corp. decided to reduce its branch footprint following its March 2019 acquisition of Beneficial Bank to about 90 from 120 between the two institutions, according to its Chief Retail Banking Officer Rick Wright. That process will end with 2020 closings in Pike Creek and Sussex County. WSFS’s Hockessin office closed after a December 2019 fire and that branch has been consolidated into a Lantana Square branch just a mile and a half away. All that will leave WSFS with 34 branches in Delaware – 20 in New Castle County and seven each in Kent and Sussex counties.
WSFS is putting the savings from its branch closings into incremental technology, particularly delivery transformation.
“Customers don’t compare us with other banks. They want us to be like Amazon and Apple, with simple online products that don’t require a lot of clicks and provide fast answers,” Wright said. “One of the things we’re trying to figure out is how to do consumer and small-business loans faster. We’ve had trouble as an industry in figuring out how to use data to make it better for the customer. We probably have way more data than the Amazons and Apples, and we need to use it to improve the customer experience, understand their needs, and build a relationship.”
WSFS has seen an increase in deposits over the past two years from $3.9 billion to $4.8 billion.
“Even though we’re seeing transactions decrease every year at about an 8% rate – and that’s accelerating with mobile – most of that [deposit] growth comes from people walking into the branch,” Wright said, adding that WSFS is not trying to drive them toward digital engagement. “The human touch remains really important. We want to humanize digital. For example, [we’re piloting a] MyWSFS application where you can pick your banker and have an encrypted chat, and we’re working with fintechs to do more things in the innovation space such as home-equity loans. But that doesn’t mean we’re going to digitize everything.”
PNC plans to close 31 branches footprint-wide in 2020, after closing more than 80 last year, but Delaware is not on the initial chopping block.
PNC closed two branches in early 2019 in Bear and Newark, respectively. A PNC spokesman says there are no additional branch consolidations scheduled in the Delaware market over at least the next three months. He added that about 71% of consumer customers used non-teller channels for the majority of their transactions during the fourth quarter of 2019.
Bank of America Delaware Market President Chip Rossi says his institution is building a “seamless high-tech, high-touch customer experience across
all channels, including its financial center and ATM network.”
He concedes that clients are using the bank’s digital tools more and more but “they still rely on in-person conversations with financial center professionals for some of their more complex financial needs such as buying a home and saving for retirement.”
The bank, which has five financial centers, three Merrill Lynch offices, an office for clients of its Private Bank, and 29 ATMs throughout the state, plans to open a new financial center in Newark in 2020 that Rossi says will “be similar to other centers we have opened that offer state-of-the-art ATMs for handling all transactions, as well as high-tech videoconferencing capabilities to connect with banking specialists. In addition, a video concierge or self-service kiosk provides our clients with the personal guidance they need, directing them to a dedicated room where they can have private and secure conversations about their financial needs and goals.”
Rossi summarized what seems to be a common goal.
“We’re building a network that creates a simple and seamless banking, lending, small business and investing experience – available in the palm of our clients’ hands through our mobile platform and also via our financial center staff, who are always available to provide expert advice and guidance,” he said.
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