JPMorgan Chase commits to the branch network

About a year ago, Bank of America announced that it would close up to 10% of its branches in the next few years.  Some industry commentators interpreted this as signalling the demise of the bank branch.  In a previous blog, EMI argued that this was not the case, but that the role of the branch is changing, with other channels handling a majority of day-to-day transactions, and with branches increasingly used for complex transactions that require face-to-face interaction.

Banks’ continued commitment to the branch channel was highlighted in JPMorgan Chase’s Investor Day presentations this week.  Some branch-related takeaways from these presentations:

  • JPMorgan Chase opened 154 new branches in 2010, expects to open 225 new branches in 2011, and plans to add up to 2,000 new branches in the next five years (more that half of which are planned for its key growth markets of California and Florida)
  • Branches accounted for 35% of new credit card account production in 2010, up from 11% in 2006.  Branches are now Chase’s largest credit card acquisition channel

In addition, JPMorgan Chase has adapted to the changing role of the branch by hiring more sales specialists.  According to its latest quarterly financials,  Chase personal bankers rose 21% y/y to more than 21,700 in 4Q10.  Sales specialists grew 22% to almost 7,200.

As banks recommit to fostering long-term relationships with their customers, they see branches are playing an integral role.  From a sales and marketing perspective, key challenges include:

  • Ensuring that the customer experience is consistent across all service channels (branch, call center, online, mobile, etc.)
  • Changing branch layouts
  • Training and providing support tools to new and established branch personnel to adapt to the new role of the branch
  • Communicating the wide range of services available in branches to customers and prospects