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Invasion of the bank branch hits Oregon
September 7, 2003
PORTLAND, Ore. - Bank of America on Sept. 8 was slated to open one of its new prototype branches, which it calls financial service centers in Portland.
Charlotte, N.C.-based BofA expects to open 15 to 20 of the new branches in the Portland area during the next two years. Most of the locations will represent net growth, rather than just replacing existing branches, according to a report in the Portland Business Journal.
In addition to the new branches, BofA will replace all of its ATMs in the Portland area with new-generation machines based on a Windows platform. All Oregon branches also will receive updated computer systems and equipment, some of which will enhance online banking.
The prototype branches include an open retail environment with greeters, glass-enclosed conference rooms for private meetings and a media wall featuring financial broadcast news, periodicals and other materials on personal finance. Among the high-tech features are safe deposit boxes secured by palm-reading devices and kiosks for self-service and multilingual telephone banking.
Roger Hinshaw, the bank's Oregon president, said the branches mark a major investment BofA is starting to make in metropolitan Portland. On a national level, the prototype signifies BofA's efforts to use its branch network, the nation's largest, to attract new customers and to sell higher-end products and services.
(See related stories Banks on branch bandwagon and Industry watchers predict bank branch boom)
Hinshaw declined to put a dollar figure on BofA's multi-year investment in Oregon. "It's a significant number by national standards within our company," he told the Business Journal.
Nationwide, BofA plans to open about 550 of the new financial service centers during the next three years. BofA now operates more than 4,200 branches in 21 states.
"It wasn't all that long ago that we were all thinking that banking centers were dinosaurs, we were all going to use ATMs," Hinshaw said.
While ATMs and internet banking have their place, the personal service available at branches remains important to many customers, he said.
With deposits in metropolitan Portland of $2.86 billion as of June 30, 2002, BofA held 15 percent of the market, behind U.S. Bank and Washington Mutual, according to the Federal Deposit Insurance Corp. Statewide, deposits of $3.6 billion put it in fourth place, behind U.S., Wamu and Wells Fargo, and BofA also ranks fourth in terms of branches.
Its branch network puts BofA in a position to build some high-margin retail business, said Jim Bradshaw, a banking analyst with D.A. Davidson & Co. Most consumers still go to branches to open their primary checking account or obtain consumer loans. If a bank is going to sell insurance products or mutual funds, they are more likely to make those sales to consumers visiting branches, he said.
Last year, Bank of America had a national goal of increasing its number of checking accounts by 500,000. The bank added 568,000. In 2003, the national goal is adding 1 million checking accounts.
"They are one of many banks that are adding accounts, and their figures are impressive," said John Kline, an analyst at Sandler O'Neill & Partners in New York.
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