News

Bank One eliminates teller fee, acknowledges importance of the branch

December 17, 2002

CHICAGO -- After more than seven years of charging some of its customers $3 to speak to a teller, Bank One Corp. is getting rid of the much-maligned fee.

Beginning immediately, more than 400,000 customers with its Basic One checking account will stop paying the $3 charge. (It rolled back teller fees on other accounts in 1996.)

According to a report in the Chicago Sun-Times, elimination of the teller fee is one of many changes Bank One is making in its consumer banking division, as competitors like Harris Bank, LaSalle Bank, Fifth Third Bank and others build new branches to grab more customers in the Chicago area's highly fragmented banking market.

"Why have it?" Charlie Scharf, head of Bank One's retail banking group, told the Sun-Times. "I wasn't here when we started it. I really don't understand why we'd have it."

Scharf said that the bank plans to add 30 Chicago area bank branches to its more than 200 existing branches and 70 more ATMs to its network of more than 1,000 ATMs. It will also add what it calls "relationship bankers," advisers who help customers find the right type of accounts, and will extend its bank branch hours.

Scharf said he predicts the bank will spend an extra $15 million in 2003 on those improvements and on refurbishing existing branches and ATMs.

"Banks did an awful lot over the past years to figure out how to get customers out of branches," Scharf said, including encouraging customers to use ATMs and online banking services in lieu of visiting tellers.

"Beyond a shadow of a doubt, [banks learned] branches are important to customers," Scharf said.

"Banks are waking up. The traditional branch still matters," said James McCormick, president of First Manhattan Consulting Group in New York, a bank consulting firm. Some bank customers "go to a branch at least a few times [a year] and there's a whole bunch of households that ... by preference, like to make a person-to-person transaction."