Banks across the country are faced with a constant challenge: keeping up with technology and how it is changing the way people do banking.
At the same time, some banks are succeeding by emphasizing something that can’t be automated: relationships.
The trend toward automation and online banking has caused financial corporations to reevaluate how they deal with customers and how they move forward with locations. Banks in Southwest Florida and beyond are closing branches to focus on online services, and, the still-existent locations are moving toward automation within the buildings to save costs and improve customer service.
In fact, technological advances may lead to the largest reduction in banking employees in the history of the U.S., according to a recent Wells Fargo report. The report states that with the banking industry’s yearly spend of $150 billion on technology, the “headcount” for Wall Street and the banking industry could decline by 200,000 over the next decade.
With the advent of new technology, Wells Fargo, like other national banks, continues to “evaluate our branch network,” according to spokesperson Jacob Jordan.
While Jordan couldn’t comment on specific locations such as Southwest Florida, he told The News-Press that Wells Fargo bases its distribution strategy on “customer trends, market factors and economic changes.”
“Based on our current assumptions regarding consumer behavior and our own technology advances, as well as other factors, our total branch network has declined,”
he said. “While branches are important in serving our customers’ needs, customers have more ways than ever to bank and digital usage continues to increase.”
A 2019 report from management consulting firm McKinsey & Co. stated that “a second wave of automation and AI” will be emerging within the next few years and will lead machines to handle up to 10% to 25% of the work across bank functions.
Additionally, the number of U.S. Federal Deposit Insurance Corporation-insured banks has been steadily declining since 1990, when there were over 12,000 FDIC-insured commercial banks in the country. As of September 2019, this number has dropped to 4,587.
Online banking leads local branches to be repurposed with new uses
“With the onset of automation in the banking industry, along with the regulatory cost to operate, banks are always struggling with the right mix of brick and mortars and online platforms,” said Gary Tasman, the CEO of Cushman and Wakefield in Fort Myers.
According to Tasman, there are plenty of examples of former bank buildings in the Southwest Florida area that are now being utilized for other purposes.
“Banks study location from a perspective of convenience for their customers … and, most importantly, billboard value,” he said.
Tasman said that many of these former banks were housed…