What do bank branches offer in an online-banking world?
JPMorgan Chase’s purchase of First Republic Bank includes billions of dollars in loans and securities, yes, but also all of First Republic’s physical branches. There will be some overlap: An analysis by Bloomberg finds that the vast majority of First Republic’s full-service branches are within a mile of current Chase locations. Chase isn’t saying yet what it plans to do with all the real estate. But in an online banking world, going to a bank IRL, as they say, still has its purpose.
In fact, some people go a lot. Much like a pub, a bank has its regulars. Dewayne Brinkley, a security officer at a Chase branch in downtown Baltimore, said he sees some people at least once a week.
“Depending on what’s good with them, you might see them in the same day as well,” Brinkley laughed. “If the money is good, you’ll see them in the same day.”
Brinkley said a lot of those frequent customers are business owners, including 24-year-old Chris Watson, who gave Brinkley a quick hug in the bank’s entrance. Watson said he comes there at least three times a week and came on this day to deposit $1,500 from a customer who paid him in cash.
“It’s going to be quick and easy. You get a deposit slip, you just fill that out, give them the cash, boom,” Watson said.
Watson said he runs a trucking and logistics company and manages a few Airbnbs.
“I don’t really like keeping cash on me at all,” Watson said.
He also makes withdrawals, gets cashier’s checks and drops off money orders. All things that are hard to do online.
There’s value for a bank in getting people to come in too.
“This is a customer-based business,” said Jaime Peters of Maryville University in St. Louis. “It’s become much more important to have quality customer service in banking because it’s such a commodity product, especially on the retail side.”
Peters said a lot of people open bank accounts in person, and some still use safe deposit boxes. Others only use cash and have to go to a teller to get the exact bills they need.
“They tend to like certain dollar amounts, $1, $5, $10, that type of thing,” she said.
There are fewer places to do that now. The number of bank branches in the U.S. peaked in 2009 at 85,834, according to the Federal Deposit Insurance Corp. By 2022, that had dropped to 71,190.
Peters said when there’s an acquisition, like Chase taking over First Republic, some consolidation is inevitable, and customers adapt.
“We will cross streets to get to a bank branch,” Peters said.
Peters also pointed out that not all in-person interactions happen at the branch itself. Some bankers make a point of visiting their commercial clients in person to keep up relationships.