Tag Archives: channel

JPMorgan Chase continues to add branches and sales specialists

Given that there is much discussion in banking circles on the future of the branch, it is interesting to note that JPMorgan Chase is continuing to grow its branch network, as well as continuing to grow specialist staff numbers (notably personal bankers and sales specialists).  According to data published this morning for its Retail Financial Services unit:

  • Chase’s retail branch network rose by 240 over the past year, and by 112 in the quarter, to 5,508 branches.  Although it recently scaled back its aggressive branch expansion plans, it sees significant opportunity to expand its retail network in selected markets, such as Florida.
  • It now has more than 6,000 sales specialists, which represents a y/y increase of 23%.  Chase ratio of sales specialists per branch increase from 0.93 in 4Q10 to 1.09 in 4Q11.
  • Chase has also significantly grown its network of personal bankers, with an increase of 12% in the past year, to 24,308.  As with sales specialists, the ratio of personal bankers per branch rose, from 4.13 in 4Q10 to 4.41 in 4Q11.

Internet is now Bank of America’s largest credit card account production channel

Bank of America’s Full Year 2010 Investor Factbook revealed some interesting trends in various channel’s share of credit card account production

  • eCommerce channel accounted for 36% of the bank’s credit card account production in 2010, up significantly from 15% in 2008
  • Bank branch network share fell from 25% to 21% (note that Bank of America was at the forefront in the mid 2000’s in driving credit card sales through branches)
  • Direct mail share rose from 20% to 21%, stemming steady declines in its share of account production in recent years

The findings underscore the growing importance of the Internet as a sales channel.  However, what the Bank of America data does not reflect is the fact that consumers now tend to use multiple channels before making an acquisition.  For example, a consumer could receive a credit card offer in the mail, but submit their application via the Internet.  Therefore, bank credit card issuers need to ensure that these key channels (Internet, branch and DM) are all in synch to optimize sales effectiveness.

New FDIC data shows reduction in banks, branch numbers

FDIC has published comprehensive U.S. bank data for the period ended June 30, 2010. It reported that the number of bank branches fell 1.0% year-over-year, to 98,514. The total number of banks (comprised of commercial banks and savings institutions) fell by a larger percentage, 4.4%, to 7,820.

It is worth noting that, at the height of the financial crisis, some industry commentators believed that the number of banks in the U.S. would fall by 50%.  At the current rate of attrition, this is very unlikely.  However, bank consolidation should continue, with banks that have weathered the financial crisis well picking up failed or vulnerable banks in order to expand their retail footprint.  This may involve some branch reduction, as overlapping branches are eliminated.  However, branch numbers should continue to decline at a lower rate than banks.

From a marketing and sales support perspective, bank mergers and acquisitions create both opportunities (expanded retail footprint; access to new products, services and technologies; potential entry into new customer segments) and challenges (rebranding acquired banks and branches; implementing consistent marketing and sales support processes; minimizing churn from acquired bank customers, etc.).