If you are not that familiar with the consumer banking industry in the United States you may not know that insiders call your local bank branch a “store”—you know, like the place that sells you stuff. And you might be not aware that whenever you enter your local branch, bankers look at you solely as an opportunity to make them money.
There are fees for virtually every banking transaction—from cashing a check (yes really) to simply keeping your account open. Fees for wire transfers, cashiers checks and fees for bounced checks. Fees to use the ATM, and fees to have a savings account. You see, banks are a capitalistic, private, money-making venture—not a place designed as a public service.
I dread going into my local bank. With each interaction, I will receive at least one “up-sell” opportunity…”I see that you have a large sum of money in a standard savings account—can I talk to you about putting that money to work for you?”—ah, you mean how can you make more money off of me, don’t you? The good news is with electronic banking, there are fewer and fewer reasons I have to go into my local “store.”
Still, it was with great excitement that I heard that Wells Fargo Bank is testing a new local branch store model. They’re trying out smaller mini-branches with fewer employees and less real estate. Tellers will be replaced with roaming customer service people using a tablet computer i.e. an iPad-like device, to facilitate transactions. And all of those “sales people” sitting at desks around the store—they’ll be replaced too. The first mini-branch opens today in Washington. Hopefully it will be a success and roll out the other 6000+ Wells Fargo stores across the country soon. The plan is to serve customer’s basic needs in half the space—which will save the bank money. The Wall Street Journal reports that typical branches are larger than 4,000 square feet and cost roughly $3 million to build, depending on the size and other features. Older branches can be as large as 10,000 square feet.The minibranches take up 2,000 square feet or less. Bank executives estimate the operating costs of the branches can be 40% to 50% below traditional branches.
I’m simply looking forward to few sales people asking me to do a “quick review of my financial needs.”
Old Bank image courtesy of Shutterstock