Before you answer that question in the headline — because Charlotte is a bank town, and that’s just what happens in a bank town! — note that fewer people are visiting bank branches these days. In fact, ever since the recession, banks nationwide have been trimming the number of branches they operate.
But around Charlotte, they’re popping up in some of the fastest-growing and priciest neighborhoods.
Remember Babalu? The highly anticipated taco restaurant that opened in 2016 and closed two years later on East Boulevard in Dilworth? That space is being renovated and will open as a Fifth Third Bank branch next year. Over in South End, Fifth Third is opening a branch in October at the corner of Camden and West, right off the light rail. It’s in the spot where Design Within Reach used to be.
Then there’s JPMorgan Chase, the biggest bank in the country in terms of assets, which last year announced plans to enter the Charlotte market with 20 (twenty!) branches over three years. The first came in March at Uptown’s most prominent intersection, Trade and Tryon. In addition to plans to open in areas like the Blakeney shopping center, JPMorgan is building a new branch at the Park Road Shopping Center, on the corner where the McDonald’s was.
Charlotte’s banking scene is already competitive. Bank of America is based here. Wells Fargo, which acquired locally based Wachovia in 2008, has its largest employee base in Charlotte. Truist opted to establish its headquarters here after Atlanta’s SunTrust merged with Winston-Salem’s BB&T last year.
Banks like Charlotte. They see opportunities for growth here. And they still see branches as a vital way to connect with customers and build loyalty. Opening high-tech, modern branches in hot neighborhoods gives a competitive edge to banks trying to lure new customers.
Take Fifth Third, for instance. The Cincinnati-based bank entered the local market in 2008 with its acquisition of Charlotte-based First Charter.
In the dozen years since, Fifth Third has seen Charlotte as “a key area of focus,” says regional communications manager Amber Darnell.
When scouting new locations, Darnell says, Fifth Third focuses on dense, highly visible spots that will complement the bank’s digital offerings like its app. Its new branches feature the bank’s “NextGen” design, which are about 2,400 square-foot, open concept, high-tech facilities.
In addition to its planned East Boulevard and Camden Road locations, Fifth Third also plans to open branches in Midtown, Stonecrest, New Bern Station, and Myers Park, where the old Queens Crown Automotive was.
“While customers are using digital options for basic banking needs, we find that they prefer in-person discussion for big financial decisions, need problem resolution or are seeking advice,” Darnell says.
Traditional bank branches have lost lost much of their allure, however, thanks in large part to the emergence of new technology.
Think about all the things you do on your banking app that you may have done at a bank branch before: depositing checks, checking account balances, making transfers.
When is the last time you drove to a bank branch and waited in line for a teller?
Banks have to master the “omnichannel” banking experience that capitalizes on the strengths of physical branches while also relying on digital banking technology, McKinsey researchers wrote in a recent report.
Researchers cited Italy’s CheBanca, which started as a digital bank before opening a small network of branches in “high-traffic” areas. The retail locations offer a “cozy environment” where customers can use the bank’s digital tools (like its web terminal) or physically sit alongside a branch employee.
That sounds like what U.S. Bank executives had in mind when the Minneapolis bank opened its first branch in Charlotte last fall. It’s in the old Dean & Deluca spot, right on Tryon.
It’s a modern facility with a tech center that shows customers how to navigate its mobile app.
That branch is the first of 10 the bank plans to open locally over the next few years. Its second, on Pineville-Matthews Road in south Charlotte, opens this fall.
U.S. Bank already had tens of thousands of customers here in areas like credit card and mortgages, so the company saw opening a branch as a way to “serve them in a more holistic way,” Tim Welsh, U.S. Bank’s vice chairman and head of consumer and business banking, told the Agenda last year.
That’s the case with many out-of-town banks looking to expand here. Charlotte is a city of transplants — roughly 120 people moved here every day, according to recent census data. Newcomers handle their money with whatever bank they’re already used to, even if that bank doesn’t yet have a big physical presence in town.
For years, banks closed branches as a post-recession cost-saving measure. Branches are expensive to operate, and they’re hardly worth the hassle if they’re not performing well.
Bank of America went from about 6,000 branches in 2010 down to 4,500 by the end of 2017, according to a Charlotte Observer story a few years ago. These days, the bank operates 4,300 nationwide, according to spokesman Mark Pipitone.
In the Charlotte region, Bank of America operates 58 financial centers (that’s what they call branches). The company is in the midst of modernizing 30 of its local financial centers with new technology and new furnishings.
“We are modernizing because fewer people are coming in to conduct transactions,” Pipitone says. “They’re instead coming in to engage with our associates who can provide professional advice about meeting their financial goals.”
According to a Wall Street Journal report this summer, the coronavirus pandemic could accelerate banks’ branch consolidation.
That’s because people are visiting bank branches even less frequently these days.
In its most recent earnings report, U.S. Bank said the use of branches for transactions has declined as digital use increased. Digital uptake further accelerated this year because of stay at home orders, the bank said.
Branch transactions fell from 35 to 33 to 24 percent of total transactions in the third quarters of 2018, 2019, and 2020, respectively. Over that period, digital use rose from 65 to 67 to 76 percent.
In the first half of this year alone, Wells Fargo closed 54 branches nationwide. In Charlotte, the bank operates 75 branches, says spokesman Josh Dunn. Reductions reflect market factors, economic changes, and consumer trends, including “the way our customers increasingly use digital channels while decreasingly transact within the branches,” Dunn says.
But the bank continues to open new locations. In July, Wells Fargo opened a new retail banking concept called an Express Center in the Prosperity Village area of north Charlotte. In a 1,000 square feet space, an Express Center has a “digital-first” format, without a teller line, that is supposed to complement traditional bank branches, Dunn says.
Customers can complete transactions digitally in an Express Center but employees are standing by to assist with things like opening accounts.
“We know our customers value the personal connection they have with our branch bankers, and our bankers provide valued service and financial conversations to customers,” Dunn says.
“At the same time, everyday tasks like deposits, withdrawals, and loan applications can be accomplished using our convenient mobile and online tools.”