Future of banking involves hybrid approach between digital, in-person service
Applying for a loan or depositing a check used to involve the nuisance of making a bank run. Now, a prompt to your smartphone can offload such chores to a virtual assistant.
For the sixth year in a row, consumers, especially younger ones, manage their money through mobile apps more than any other way.
A new American Bankers Association survey finds 76 percent of Americans transact routine banking on their devices.
Visiting a bank branch comes in a distant third at 9 percent.
The days of the transaction-heavy bank branch might be dwindling, but regional banking experts say technology won’t make brick-and-mortar locations obsolete.
“While digital banking has made everyday transactions fast and more convenient, many financial decisions still benefit from personal guidance and trusted relationships,” said Chris Campbell, president of Centier Bank.
Goshen-based Interra Credit Union is counting on that sentiment. It opened a dedicated business center in Granger on May 20.
“Businesses still bank with people not just an institution,” said Andy Marshall, chief operating officer and executive vice president of Interra.
Even large banks like JPMorganChase know the value of community banking. The national bank announced its American Dream Initiative in March to help 10 million small businesses.
Dozens of banking institutions compete for tens of billions of dollars Region residents have in deposits. They assert themselves in the regional market with nearly 290 locations from Lake County’s state line road east to Elkhart.
Centier, which has headquarters in Merrillville, has already staked out 64 locations and continued last year to expand its network to Fort Wayne and downstate Lafayette, Brownsburg and Indianapolis.
More are on the way in Michigan City and the metro Indianapolis suburbs of Greenwood and Westfield.
“We believe that a physical branch presence remains essential to effectively serving both personal and business clients,” Campbell said.
Access and trust
Education plays a big part of a bank’s role in their communities.
“Today, consumers are flooded with financial advice from websites, apps, social media and influencers, making it increasingly difficult to know who to trust,” said Deborah Lumpkin, Centier Bank’s chief real estate and market expansion officer. “That’s where community banking continues to matter.”
Centier’s bank branches offer services that technology cannot, she said, which include “personalized financial guidance from experienced professionals who understand our clients’ goals and can help them navigate important life decisions.”
That guidance has lasting implications.
“Our team is available to answer questions, provide solutions and build lasting relationships,” Lumpkin said.
Tim Crane, Wintrust Financial Corp.’s president and CEO, said his bankers are essential to building long-term connections.
“Branches matter for a few reasons,” Crane said. “There are many customers who prefer to work directly with our branch staff. Exceptional customer service is a strength of ours, and our professionals become trusted financial advisers to our customers.”
Many large national banks also are expanding their branch networks, Campbell said.
“They recognize what community banks like Centier have long understood — clients value the convenience of digital banking but also want access to knowledgeable people when they need advice and support,” he said.
JPMorganChase plans to hire 150 more community managers and double its community centers nationwide. Nineteen centers already serve low- to moderate-income communities around the country.
“When one person gains the skills to budget, save and build for the future, the impact extends far beyond that individual — it strengthens families and communities,” said Diedra Porché, head of Chase community and business development, in a statement. “By expanding our community-based workshops and coaching, we’re bringing practical financial education closer to home for more people.
“We’ve seen the power of this approach firsthand, and we’re just getting started.”
Proximity is key for customers.
“(Centier’s) team members live and work in the same communities as our clients, which provides local insights,” Campbell said.
Like other regional banks, Wintrust’s bank locations are also a way to support the community.
“Branches also allow us to be deeply rooted in our communities,” he said. “Our team members serve on boards and volunteer at events. We invest in over 2,000 organizations across our markets each year to help build strong, sustainable communities.”
Wintrust plans to open three new branches this year: St. John, Valparaiso and Gary. The Rosemont, Illinois-based bank has 210 branches in Illinois, Michigan and Wisconsin, including ones in Crown Point and Dyer.
Crane said the new Gary location in the Tolleston Opportunity Campus will provide banking services along with financial education. The branch will be in the Crossroads YMCA lobby.
Focus on business banking
Centier’s branches also are vital to small business clients who need to meet with their business banker, discuss lending needs and access services that support their growth.
“And the level of trust and accessibility Centier Bank provides is something no app or algorithm can replicate,” Lumpkin said. “We believe banking should be both high-tech and high touch.”
Barry Mullan, a consumer banking region executive, said Bank of America also has a business empowerment service.
“If somebody comes in and wants to establish a new business relationship, we can point them in the right direction on how they can incorporate or set up the business, something our clients might be paying hundreds, if not thousands of dollars for similar services elsewhere,” Mullan said.
“We can also share with them the importance of establishing credit or how to leverage payroll resources.”
Marshall said Interra’s new business center is a step forward in their mission to deliver accessible, relationship-focused financial solutions tailored to today’s business landscape.
“The strategy surrounding the business center in Granger is specifically focused on serving the business community and specialized services Interra offers,” he said. “This contrasts from full branch models of the past that provide all services a la carte.
“This location is entirely focused on being a service hub for our staff and the businesses, private banking, treasury management and mortgage lending clients in the area.”
Finding critical mass
Region banks co-exist with more than 32 credit unions in Lake, Porter, La Porte, St. Joseph, Elkhart and neighboring rural counties. They serve tens of thousands of members at about 100 locations.
Thomas Gryp, president and CEO of Notre Dame Federal Credit Union, said they just opened offices in Elkhart and Fort Wayne earlier this year. Those locations are in addition to about a dozen from Lansing, Michigan, to Tucson, Arizona.
“When we look for a new location, it’s not random at all,” Gryp said. “To open a modest 2,000-square-foot branch and hire three or four people to staff it could cost in excess of $1.5 million.
“It’s important not to spend our credit union members’ money to build one on a wing and a prayer.”
The credit union performs market research before deciding on new locations.
“We use technology aggressively to meet new people and open new markets,” Gryp said. “We look nationwide and find out where we are already generating activity from internet banking.
“Once that long distance activity builds up to a certain level, somewhere around $20 million to $30 million of deposits and loans, we see a critical mass where it may make sense to put people on the ground.”
The decision process doesn’t end there.
“We also go into the market where we’ve had success dealing with churches, primarily, but not exclusively Catholic,” he said. “We will serve members of their congregations and school teachers.
“Once we’re there, we get into the value of bricks and mortar.”
Branches help foster relationships within those communities.
“We use those like a beachhead, and through word of mouth and being involved in the community, word spreads and people hear about us and want to do business with us,” Gryp said.
The credit union has more than 60,000 members and serves more than 900 groups.
Walk-ins and referrals
Many people have a foot in two worlds — happy to do fintech banking and all its clicks, but they also like to walk into a branch office and look their banker in the eye when they’re having problems. Losing their job or facing a family crisis, like illness or divorce, is easier to communicate in person.
“They come in because they are hurting, and it doesn’t help to tell their woes over the phone,” Gryp said. “We empower our branch managers and our staff to look for exceptions and overrides and fight for our members’ interests.”
That all came together in 2021 when Notre Dame FCU opened its Whiting branch.
“That was a good day,” he said. “We went there because we saw that the community was underserved.”
The investment has paid off.
“Our Whiting branch has exceeded our expectations,” he said. “I’m so glad we did that.”
Choosing their Elkhart branch didn’t require powerful analytics.
“For the longest time we had been looking to open an office in Elkhart County,” Gryp said. “We had more than 5,000 members already living there and loyally driving (about 15 miles) to our St. Joe County branches.
“By the grace of God, we found 6,000 square feet of space in downtown Elkhart.”
The branch on South Main Street opened April 13.
For Interra, relationships are still key in areas with high traffic. Interra Credit Union serves nearly 90,000 members across Northern Indiana and parts of Ohio.
The credit union has 15 locations in five counties that feature retail, commercial and agribusiness, mortgage and wealth management services.
“It’s our belief that, even as banking changes more digitally, that people still want that in-person service experience in close proximity to where they work or live, and it’s our intention to deliver upon that access in the primary areas of our current membership base and future membership,” Marshall said.
National notice
JPMorganChase has about 30 Northwest Indiana locations, according to Drue Anderson, director of Chase’s Midwest division and head of its virtual banking sites across the U.S. and the Philippines.
“We already have the largest branch network in the United States with more than 5,000 locations,” he said, and it has been growing in recent years. Chase has gradually opened 1,000 branches.
“Those new builds have contributed about 40% of the market share gains since 2019,” Anderson said.
Customers have spoken, and Chase is listening.
“We plan to add hundreds of new branches in underserved markets over the next two years,” he said. “Our strategy is driven by what our customers need.”
While customers love their digital services, Anderson said Chase knows branches are still important.
“We have had nearly 1 million branch visits per day,” he said. “So, we believe, today it’s a working strategy.”
Speaking to a local expert, having human judgment still matters and will continue to matter in the future.
“But they also want human experiences for certain key life moments … a real conversation around mortgages, investing, or their small business,” he said.
Bank of America, which bills itself as “a digital first company that happens to do banking,” is also putting bricks and mortar down locally.
“We’re opening up locations in Schererville and Hobart this fall, and people in Northwest Indiana who already have relationships through our consumer investment and business bank perspectives are excited about it,” said Mullan, of Bank of America.
“We still get 20,000 transactions a day in the 200 financial centers in our region.”
Safety concerns
Automatic transactions also help the bank understand what clients’ long- and short-term goals are.
“Deposits are still the most common transactions because people bring in cash and check deposits,” Mullan said. “There is a sense of security walking out of a branch with a receipt in hand.”
Hru Khuenaten, a comptroller for three Gary businesses, has been doing business for years with a local JPMorganChase Bank the old-fashioned way.
“I usually visit the bank every week,” he said. “I bring them a physical check to be deposited and take back an account statement to be filed at my business.
“I prefer that because you get a chance to meet the people and get a feel for how good the bank is. They know who you are. Know your family.”
He’s also motivated by a concern about scams online.
“I feel more comfortable going inside the bank even when I use an ATM machine,” he said. “All of that plays a part in feeling more secure.”
Making customers feel safe is a priority for Chase.
“Customers are still looking for trust and protection when it matters,” Anderson said. “Having that personal connection with a human being inside the bank branch who can guide you through the process and help customers to resolve their issues makes them feel more safe and secure within their relationship with us.”
Obvious changes
More than 60 percent of Bank of America’s new accounts are opened digitally. But from a consumer perspective, people still want to deal face-to-face with bankers.
“The banking experience has obviously changed,” Mullan said. “It used to be a place to come and cash checks and bring in cash. Now we are creating an environment to get advice from our teammates.
“A client may walk into a financial center looking to establish a relationship or deepen their relationship with a new product or service.”
He said associates in branches can also help customers use their mobile apps.
“We walk you through how to do it while we discuss things we know about you and things we can help you with.”
Many regional bank locations also offer amenities such as coin-counting machines, community meeting rooms and complimentary coffee stations.
Mullan said digital and conventional banking are not incompatible.
“If a client comes in to establish a new business relationship, the teammates in our centers walk clients through it,” he said.
Sometimes customers need good counsel.
“We have clients requesting a cashier’s check to put a security deposit down on an apartment,” he said. “We can show them grants available to make a down payment on a condominium and become homeowners.” •
Read more stories from the current issue of Northwest Indiana Business Magazine.
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Heroic values on display
One-stop print shop
Power of collaboration
Avoid the unexpected
Childcare challenge
Beyond the prescription pad
New life for dormant buildings
Professional advancement
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