Branch banks hanging on

Maybe Cos Cob will have to live with nine (or more) banks awhile longer. This article points out that the branch banks are still alive. Yes, on-line banking is rapidly expanding, but old folks still like to look their teller in the face and see if she’s cheating them. And unlike other funds, deposits from these oldsters come incredibly cheap. Pay them nothing, lend out dearly, and the spread is yours to keep. But that doesn’t mean the day of the branch bank isn’t numbered and, eventually, Cos Cob will see the bricks and vaults of Peoples/Chase/BankofGreenwich/Citi/Hudson/Etc. replaced by something more profitable – probably nine new branches of CVS.

4 Comments

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4 responses to “Branch banks hanging on

  1. Retired IB'er

    Not a commercial banker so take what I say with a grain of salt: retaining stable depositor base is the name of the game. Having a physical presence in a community is a big part of attaining that goal.

    On-line/brokered CD’s are hot money and therefore are not valued as highly. You only have to look at how acquiring banks in FDIC takeovers are not assuming (generally) brokered CDs to understand.

  2. Anonymous

    Need those bank branches for the hardworking, tax evading small biz dude

    Need those CVS for shoplifting cold meds for the local meth labs….or high-value stolen toiletries for resale on ebay

  3. Cos Cobber

    CF, this has also been a know fact about banking for some time. That branches soak up the elderly’s money. Luddites too.

    The question is, what will banks do when their branch customer’s die. Buicks and Oldsmobiles soaked up the senior money too for decades only to collapse in rather spectacular fashion. The migration away from branch banking could happen in rather rapid succession.

    Our soft and fuzzy G550 friend is correct. Only businesses that deal with tangible cash in high quantities really need a branch bank. Everyone else could easily choose to abandon the branch all together. I’ve done 100% of my banking through ATMs and phone calls since 2000. Branches, ha!

  4. Old School Grump

    I too do almost all my banking by ATM and computer, and feel zero need for face-to-face with a bank branch worker, but I do like actual greenbacks, more and more as time goes by. Every electronic transaction, and everything done with a credit card or debit card, contributes to a narrative trail and ends up in who-knows-how-many databases. I’d much rather use cash for most routine purchases than help companies like Acxiom and Citicorp construct my “consumer profile.”