- The Washington Times - Monday, September 29, 2003

If District lawyer John Seiver drops by his favorite downtown Riggs Bank branch and finds the line at the counter too long, he kills time by downing a cup of Joe.

Mr. Seiver’s favorite blend, Cafe Americano, is always brewing because Riggs has turned roughly one third of the space at its 1919 Pennsylvania Ave. NW branch over to Starbucks, the nation’s top coffee retailer.

At a time when other banks are nudging customers toward automated teller machines, the telephone and the Internet, Riggs and other banks are trying to keep customers coming into their branches.

Driving the trend: research that shows customers prefer doing business face to face. Also, analysts say banks are increasingly using their branches as marketing tools to sell certificates of deposit, loans, securities, insurance and other services.



“Branches are essentially billboards,” said Bert Ely, an industry consultant in Alexandria.

Riggs, based in the District, has redesigned several branches, adding comfy chairs and television sets and providing customers with free Internet access.

“I don’t know if it’s going to get me drinking more coffee or taking more money out of the bank, but it’s a nice touch,” Mr. Seiver said of Starbucks, which opened inside the Riggs branch Sept. 5.

San Francisco-based Wells Fargo & Co., the nation’s fourth-largest bank, has added Starbucks to some of its branches, too.

Washington Mutual Inc., a fast-growing Seattle thrift, has greeters who welcome customers at the door of its branches. Tellers wear khakis and polo shirts. Loan officers aren’t chained to their desks.

BB&T; Corp. is staffing its branches in targeted areas with Spanish-speaking tellers in a bid to draw Hispanic customers.

“Banking is about building relationships. You can do that better in person than on the phone or through a Web site,” said Tim Veith, a BB&T; senior vice president.

Other banks are staying open during the evening and on weekends to draw customers who are too busy to visit during normal business hours.

It costs roughly $1 million to open a bank branch these days, according to Steve Williams, a principal at Cornerstone Advisors Inc., a Scottsdale, Ariz., industry consulting firm. The annual labor cost to operate a typical branch is roughly $250,000, he said.

Mr. Ely said costs have come down because many of the functions that were once handled inside individual branches — such as processing canceled checks — have moved in the last 20 years into centralized back offices.

Despite the rise of online and telephone banking, banks never really got out of the branch business, according to Gonzobanker.com, Cornerstone’s online newsletter.

In the past 20 years, even as the industry built a national ATM network, opened 24-hour-call centers and introduced online banking, the number of bank branches nationwide grew from 50,000 to 75,000, the newsletter reported.

In 1980, the average bank had 3.85 offices. Today, that number has jumped to 9.25, the newsletter reported.

A Gallup poll in April found 83 percent of people still visit their bank branches at least once a month, and three out of 10 are there at least four or five times a month, numbers little changed since March 2000.

Frank Newport, editor of Gallup Tuesday Briefing, told the Associated Press that his polling indicates it’s not actually the bricks and mortar that people like, but dealing with live human beings, especially when making complicated transactions or vital deposits.

“The one thing we have found incredibly important is the importance of relationships between customers and people,” Mr. Newport said.

At 1919 Pennsylvania Ave. NW, an open doorway allows customers to pass from the Riggs branch to the Starbucks.

Customers on the bank side can sit at a window that looks into the coffee shop while they log onto the terminals where Riggs offers free Internet access.

The branch also features comfortable chairs and a flat-screen television that is always tuned to financial news cable channels.

“We’re trying to sell an experience, not a bank,” said Mark N. Hendrix, executive vice president and chief marketing officer for Riggs.

The bank is considering adding a Starbucks to at least one more branch, he said.

Since Riggs began introducing its redesigned branches in December, Mr. Hendrix said foot traffic has increased, but he declined to say by how much.

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