55.4 F
Fort Worth
Monday, November 23, 2020
Banking Bank of America opens teller-less branches

Bank of America opens teller-less branches

Other News

A look at big issues on Supreme Court’s agenda

Some of the issues either already on the Supreme Court's docket when it begins its new session or likely to be before the justices...

Wall Street posts solid gains after surge in corporate deals

By ALEX VEIGA and DAMIAN J. TROISE AP Business Writers Wall Street kicked off the week with a broad rally Monday, clawing back much of...

Tarrant County ranks low in work-from-home study by NAR

North Texas ranks pretty high in the “Work from Home” category, according to a just-released study by the National Association of Realtors. But Tarrant...

Commentary: Universities and COVID-19: Charting turbulent times

Ray Perryman As the COVID-19 pandemic emerged this spring, college campuses across the United States swiftly sent students home in droves and switched to...

Self-driving cars. Self-serve gas pumps. Self-checkout supermarkets.

Add self-banking to that list.

No people. No tellers. Nobody greeting you with “How is your day going?” Although, that may come from a machine – and sooner than you think.

Bank of America has opened three mini-bank branches since the new year that have ATMs and videoconferencing but no people. Two opened in Denver and one in Minneapolis.

In addition to the ATMs, the new robo-banks – called automated centers – allow customers to make a videoconference call to a Bank of America employee at another location to discuss more complicated money issues.

“This is the beginning of the end of the American bank branch,” said Peter Fitzgerald, a former U.S. senator from Illinois, lifelong banker and founder of Chain Bridge Bank in McLean, Virginia. “Bank branches are dead. They were killed by the iPhone. It’s like the horseshoe when the automobile came along.”

According to figures compiled by the Federal Deposit Insurance Corp. and supplied by the American Bankers Association, the number of U.S. bank employees has remained relatively stable. There were 2,110,276 employees in 2012, and 2,043,480 last year.

But the number of U.S. bank branches has declined precipitously from a peak of 99,540 in 2009 to 91,861 in the third quarter of 2016, according to the ABA.

Bank of America spokeswoman Anne Pace said live banking isn’t disappearing. About 1 million people a day walk into one of Bank of America’s 4,597 locations and interact with bank employees. But the number of locations is down from 5,900 six years ago. The company has 16,000 automated teller machines.

The robo-bank customers “can have a one-on-one conversation to get a mortgage, plan for retirement, open a small business or get a car loan,” she said. “This is just a test. We haven’t rolled these out extensively. We are going to see how these go, see what we learn and make a decision from there.”

Pace said the new banks are not replacing existing locations. She also said Bank of America is adding 50 to 60 traditional centers.

Word of the new robo-banks leaked out at a Credit Suisse conference in Miami on Tuesday during a question-and-answer session with Dean Athanasia of Bank of America’s consumer banking unit.

There are no layoffs accompanying Bank of America’s robo-banks, but the new branches are part of a revolution in U.S. banking in the past few years as companies seek to save money by reducing the number of branches – and tellers and managers. Banks also are attempting to stay current with technology, which is moving toward handheld devices.

“Cash is dying out,” Fitzgerald said. “Many millennials don’t carry cash. They only use their debit card. In 2011 and 2012, bank branch traffic dropped precipitously. The last I checked, 98.5 percent of our bank’s transactions are done online and electronically.”

Robo-banking is also part of Bank of America’s strategy to expand its presence into harder-to-reach areas. At a fraction of the size of its traditional branches, the robo-banks save on real estate as well as personnel.

Bank of America’s traditional branches run about 5,000 square feet. The robo-banks are about a quarter of that size.

“There is no one-size-bank-fits-all anymore,” Pace said. “We have different centers based on different communities. We are taking some of that savings from mobile banking and reinvesting it into new centers, renovating others and hiring more specialists to provide advice and guidance to clients.”

But the days of the local teller hanging around to make change or cash checks have been replaced by technology designed to service more robust profitmaking centers such as credit cards, mortgages and even retirement advice.

“We are simply following our clients,” Pace said. “Mobile banking users increased to 21.6 million, and 19 percent of deposit transactions are done through mobile. That’s equivalent to 880 financial centers. We need to be there whether it’s through the mobile phone or inside a financial center.”

Bank of America is working on voice recognition technology called Erica (as in Bank of Am-ERICA) that will allow people to do virtual banking by voice with a computer, much as people use Amazon Alexa to order books or Apple’s Siri to ask questions on an iPhone.

The bank’s Merrill Edge investment service is also allowing customers to use a robo-advised platform to invest without speaking with a human.


Oh hi there 👋
It’s nice to meet you.

Sign up to receive awesome content in your inbox.

We don’t spam! Read our privacy policy for more info.

Latest News

Stocks edge higher on Wall Street on latest vaccine hopes

NEW YORK (AP) — U.S. stocks edged higher in morning trading Monday after investors received several pieces of encouraging news on COVID-19 vaccines and...

Mnuchin denies he’s trying to hinder incoming administration

WASHINGTON (AP) — Treasury Secretary Steven Mnuchin denied that he is attempting to limit the choices President-elect Joe Biden will have to promote an...

E-commerce firm that acquired Pier 1, takes RadioShack assets

Look who is joining former Fort Worth home furnishing retailer Pier 1 Imports at e-commerce-focused business, Retail Ecommerce Ventures (REV): Fellow storied Fort Worth...

Bank of America announces $2.65 million jobs initiative for Texas Black and Hispanic-Latino students

Bank of America announced a new multimillion dollar jobs initiative Nov. 19 to help students of color complete the education and training necessary to...

Huge Puerto Rico radio telescope to close in blow to science

SAN JUAN, Puerto Rico (AP) — The National Science Foundation announced Thursday that it will close the huge telescope at the renowned Arecibo Observatory...