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Bank buildings: anyone here work in the banking industry at a higher level?
Posted by: mrbigstuff
Date: August 25, 2021 02:26PM
My question is quite simple, actually: how do banks justify all the brick and mortar building? What is their increasing revenue stream from these edifices?

RE is extremely expensive around here, yet they build on prime lots. I'm not talking headquarters, only branch buildings. My local bank (3 total branches) shut down two of their branches over the years, I assumed due to the fact that online banking was eating into their need to have a physical location. But the bigger banks (and I'm including the local "regional" banks) are growing their physical presence.
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Re: Bank buildings: anyone here work in the banking industry at a higher level?
Posted by: raz
Date: August 25, 2021 02:36PM
I suspect that the cost of running a branch is the price they pay to provide the kind of services that customer demand. I, myself, don't go in more than once/twice a year. But, sometimes one needs to get to the safe deposit box, or get bills other than 20s, or figure out where a payment got lost.

If I had to go across town to find a human to deal with, I'd find another bank



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Re: Bank buildings: anyone here work in the banking industry at a higher level?
Posted by: testcase
Date: August 25, 2021 02:39PM
Back in the day, I read how Bank of America basically “cornered the market” of consumer banking by having SO many branch locations. It got to the point where a customer could literally find multiple BofA branches across the street from one another! I doubt that’s the case today. Almost all of my banking is done online these days BUT, if I have a problem, I REALLY, REALLY, REALLY want to be able to talk with a HUMAN at a brick & mortar location. A GOOD banker is a valuable resource; one that “youngsters” ignore to their detriment.
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Re: Bank buildings: anyone here work in the banking industry at a higher level?
Posted by: mattkime
Date: August 25, 2021 02:54PM
They pay for it by chaining down the pens.



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Re: Bank buildings: anyone here work in the banking industry at a higher level?
Posted by: Don C
Date: August 25, 2021 03:42PM
Many years ago now, I opened a checking account for my dance group. I only wrote checks once a month, but made cash deposits weekly. My intent was to establish a relationship with the branch so that if I needed something, they would know me and things would go smoothly. Well, I was regular but they changed tellers so often that I never got that personal link that I was hoping for. Pretty disappointing and after a few years I gave up on the concept and moved my account to a credit union.
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Re: Bank buildings: anyone here work in the banking industry at a higher level?
Posted by: JoeH
Date: August 25, 2021 03:45PM
Quote
testcase
Back in the day, I read how Bank of America basically “cornered the market” of consumer banking by having SO many branch locations. It got to the point where a customer could literally find multiple BofA branches across the street from one another! I doubt that’s the case today. Almost all of my banking is done online these days BUT, if I have a problem, I REALLY, REALLY, REALLY want to be able to talk with a HUMAN at a brick & mortar location. A GOOD banker is a valuable resource; one that “youngsters” ignore to their detriment.

BoA's branch here was closed quite a while ago, it has had a for sale sign in front of it for at least a year. Not sure when since I closed all accounts with the bank they acquired to get that branch a couple decades ago. Closest branches are half an hour or three quarters hour drive from here. All they have closer now are ATM kiosks.
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Re: Bank buildings: anyone here work in the banking industry at a higher level?
Posted by: mikebw
Date: August 25, 2021 04:15PM
My bank has been closing all the nearby branches over the last few years. I rarely have a need to go so it's not a big problem for me.
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Re: Bank buildings: anyone here work in the banking industry at a higher level?
Posted by: Michael
Date: August 25, 2021 05:06PM
Quote
mrbigstuff
My question is quite simple, actually: how do banks justify all the brick and mortar building? What is their increasing revenue stream from these edifices?

RE is extremely expensive around here, yet they build on prime lots. I'm not talking headquarters, only branch buildings. My local bank (3 total branches) shut down two of their branches over the years, I assumed due to the fact that online banking was eating into their need to have a physical location. But the bigger banks (and I'm including the local "regional" banks) are growing their physical presence.

I'd bet it's related to older folks (not necessarily senior citizens) and money. The mean bank account amount is $41,700 and the median is $5300. And they're paying almost nothing in interest on those amounts. Older folks have more money deposited than younger ones do and I'd bet that those older folks are much more comfortable seeing bank branches scattered around rather than transferring money to online banks. So, perhaps the banks continue to build buildings because their largest depositors are more likely to deposit funds when they see local branches.

Here's some interesting demographic info related to bank account averages: [www.creditdonkey.com]
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Re: Bank buildings: anyone here work in the banking industry at a higher level?
Posted by: C(-)ris
Date: August 25, 2021 07:05PM
People will not bank with someone if there aren't branches near by. Even if they only use a branch once a year it doesn't matter, they want to have the option to go in and talk to someone. If they close the branches they will lose local clients.



C(-)ris
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Re: Bank buildings: anyone here work in the banking industry at a higher level?
Posted by: mrbigstuff
Date: August 25, 2021 07:05PM
Michael, very interesting. Thanks for that perspective.
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Re: Bank buildings: anyone here work in the banking industry at a higher level?
Posted by: mrbigstuff
Date: August 25, 2021 07:09PM
Quote
C(-)ris
People will not bank with someone if there aren't branches near by. Even if they only use a branch once a year it doesn't matter, they want to have the option to go in and talk to someone. If they close the branches they will lose local clients.

That doesn't really get to my core question: why are banks building new branches on highly desirable real estate when so few people walk into a bank now?
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Re: Bank buildings: anyone here work in the banking industry at a higher level?
Posted by: graylocks
Date: August 25, 2021 09:19PM
I bet many small to medium businesses still need the services of a bank and a solid connection with a banker.



"Success isn't about how much money you make. It is about the difference you make in people's lives."--Michelle Obama
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Re: Bank buildings: anyone here work in the banking industry at a higher level?
Posted by: tenders
Date: August 25, 2021 10:01PM
Banks make money by taking in deposits at low (ie zero) interest rates, and lending out the money at higher rates.

Bank branches are located in places that will attract deposits from individuals and businesses, and MAYBE be convenient places to get loans.
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Re: Bank buildings: anyone here work in the banking industry at a higher level?
Posted by: RAMd®d
Date: August 26, 2021 10:19AM
I've had to go into a branch office a few times this year and it's been crowded every time.

Using the drive thru ATM a lot, the parking lot is always full.

So even with staying away in droves, my branch is always crowded.

There are still various demographics that need to talk to a teller and not an ATM.

I know people who still take their paychecks to the bank to cash them, depositing some and keeping the rest.

And most of them aren't boomers.





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Re: Bank buildings: anyone here work in the banking industry at a higher level?
Posted by: DeusxMac
Date: August 26, 2021 01:21PM
"A famous apocryphal story is that Sutton was asked by reporter Mitch Ohnstad why he robbed banks. According to Ohnstad, he replied, "Because that's where the money is". The quote evolved into Sutton's law, which is often invoked to medical students as a metaphor for emphasizing the most likely diagnosis, rather than wasting time and money investigating every conceivable possibility."
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