Despite mobile apps, banks find they still need branch staff. Some even roll out robots, couches and lattes with a "money coach."
Bank branches still have greeters, coffee and sometimes fresh-baked cookies. At HSBC, there’s also Pepper, the finance robot. About 4 feet tall, Pepper is shiny white with a lemon-shaped head, large eyes that light up blue, and a tablet attached to its chest.
Pepper might seem like HSBC Holdings’ vision for a not-so-distant future without tellers, but that’s not so, according to Pablo Sanchez, the firm’s head of U.S. retail banking and wealth management. The robot’s job is to lure pedestrians into HSBC’s flagship on Manhattan’s Fifth Avenue, then pose for selfies, field basic questions and direct customers who need real help to the right human.
When Goldman Sachs Group launched its digital consumer bank, it conducted a survey on customer attitudes. It turns out people want to find answers without assistance — until they can’t and immediately want help from a qualified banker. There’s high tolerance for self-service until it fails, and then there’s no tolerance. As banks across the country reassess branches, those findings keep getting validated.
It’s one reason why many bank tellers are getting raises this year. Conventional wisdom is that the job — held by almost a half-million Americans — is entering a sharp decline. The U.S. Bureau of Labor Statistics projects banks will eliminate more than 40,000 positions in the decade through 2026. That would likely suppress teller wages, which hovered around a median $13.50 an hour last year.
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Yet, in interviews and anecdotally, a more nuanced picture emerges. After banks received generous tax cuts in December, several of the nation’s largest — including Wells Fargo & Co., PNC Financial Services Group and Fifth Third Bancorp — said they’re raising their minimum wage to $15 an hour.
Branches and tellers aren’t going away entirely. Instead, as customers turn to mobile phones for routine financial services, tellers are being upgraded, taught to pitch loans, guide local entrepreneurs and offer technical support. The result is that at many lenders, a job widely seen as endangered by automation is starting to pay more.
“Years ago tellers just had to give you an account balance or find out if you wanted fives or tens,” said Christopher Maher, chief executive officer of OceanFirst Financial, New Jersey’s fourth-largest lender. “Now they have to solve problems like my PayPal doesn’t work, or my Venmo doesn’t work, or why doesn’t Uber accept my card?”
OceanFirst created a nine-week “certified digital banker” course, training staff on a variety of banking and payment platforms. The company said it aims to have 500 graduates by year-end. BBVA Compass Bancshares is helping tellers earn certifications and licenses to help customers with more complex financial decisions.
The strategy is to increase the number of universal tellers who can answer all questions. To reflect those skills, OceanFirst bumped its minimum wage to $15.
Sometimes there isn’t a need for an in-person teller. When a retirement home asked OceanFirst to open a mini-branch in its complex, the bank couldn’t justify the cost. Competitors were experimenting with video tellers, so it tried that.
Video teller machines look like ATMs — but with the option of pushing a button and connecting to a human. One teller can support 10 machines, performing almost any service available at a normal branch. Every branch OceanFirst has built since then is equipped with the machines, allowing them to stay open longer.
“It’s not simply ‘Oh I have mobile banking, therefore it’ll work,’ ” Maher said. “It’s got to be how you hire people, how you train people, how you reward people and how you manage them.”
Still, it’s undeniable branches are getting slimmer. Entryways with towering marble columns and private offices spread over 10,000 square feet are becoming a relic. Most branches built today are a fourth to an eighth that size, with open floors to look larger.
“You don’t want to have a big mausoleum of a branch that has 12 teller windows and there’s two tellers,” said Sanchez of HSBC.
BBVA is going modular. Walls expand or contract as needed, turning a conference room into a spot for desks. The bank has found customers like the convenience of banking online, but that they want the security of brick and mortar. So while every product is available online, each branch has its own “client experience manager” — 650 in all — to ensure people are treated well when they arrive in person.
Even if technology is ready to take over banking, not all customers are ready. Some are still uncomfortable using ATMs to make deposits, or even cash withdrawals, according to Jim Matera, head of consumer business at Apple Bank for Savings. Rather than shrinking, it’s adding branches.
“We’re trying to continue to update our technology,” Matera said. “But we are not moving to a fully self-service kind of model. At least not in the near future.”
Some major banks are studying local communities and opening specialized outlets. In areas with high concentrations of entrepreneurs, PNC and Santander Bank have been rolling out branches catering to small businesses. PNC has also taken a similar approach to tailor locations in college towns.
Santander wants small-business branches to feel like community hubs, inviting in local groups and offering financial education. Maria Veltre, who oversees branch transformation, likened the model to Lululemon’s hosting of yoga classes.
Couches and coffee
Branch banking is also getting cozier. PNC hosted focus groups to hone its atmosphere — buying rounded furniture for a “shoulder to shoulder” experience. Some new Santander branches have couches and “nooks” so customers feel like they’re in someone’s home. Veltre says mobile banking apps give people identical experiences, while branches make personal connections.
Capital One Financial is taking that a step further with its cafes. It points to a survey showing most people find banking and money stressful.
Before opening a cafe, the bank sends taste testers to the city to pick local snacks. People are encouraged to wander in, buy a latte, relax and meet with a complimentary “money coach” to develop a financial plan. They aren’t bankers and aren’t supposed to push specific products.
“They’re going to welcome you to sit down on the sofa, you’re going to have a cup of coffee,” said Lia Dean, the bank’s head of marketing and retail. “You can share an iPad together and just have an experience that feels more comfortable, more modern and takes the stress out.”
With assistance from Bloomberg’s Jeremy Lin, Brandon Kochkodin, Jenny Surane and Hannah Levitt.