In Lieu of Branches, Bespoke Bankers

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Less than a year after rethinking its branch strategy, the face of Admirals Bank is unrecognizable.

The Boston-based outfit has closed seven branches across New England, eschewing its lower-end customers and transforming itself into a high-end depository for the affluent.

Now it has only six brick and mortar local branches. Its newly built bespoke banking center is located on the prestigious Boylston Street in the heart of Beantown. Its corporate headquarters is across the street.

Wealthy customers who want to make deposits are visited at home by "bespoke" bankers, who make house calls in Mercedes-Benz C-Class sedans.

When an Admirals customer signs up with the bank, they are given the cell phone number of two of roughly eight special tellers, says Nicholas W. Lazares, Admirals' chairman and chief executive.

That bespoke banker is then called upon to help a customer sign up for services that range from online bill payment to account issuance.

"It's been immediately enormously successful," says Lazares, adding that since December, when Admirals first launched its bespoke banker program, the roughly $600 million-assets Admirals has gained nearly an additional $60 million in deposits.

That cash is now helping fund the privately held bank's acquisition of discounted commercial real estate loans, its auto loan business and its home improvement lending business, among others, Lazares says.

Admirals, like many other banks, is in the midst of changing its business model.

For instance, some retail bankers are using technology to mimic the functions of a branch.

This year, Dollar Bank of Pittsburgh began using NCR's APTRA Interactive Teller automated teller machines to connect its customers to its employees using cameras embedded in the face of the devices. And Bank of Montreal is videoconferencing in financial experts to remote locations in order to provide better service.

Instead using interactive ATMs or other new platforms, Admirals is replacing a majority of its real world outposts with specialized employees armed with company-issued iPads.

The idea is meant to serve attorneys with clients that have come into serious amounts of cash.

Other banks that primarily serve wealthier customers have employees making similar visits to customers' homes.

"It's a formula that can work in certain segments," says Bart Narter, a senior vice president with the market research firm Celent. "Certainly not the mass market, because it won't pay, but the reality is you don't necessarily need a branch for this sort of business. All you need is a parking place for your Mercedes."

Lazares — a former attorney himself — is an exile from Lehman Bros.

Before Admirals, he sold his Boston-based Capital Crossing Bank to the financial services company for $210 million a year before Lehman declared bankruptcy in 2008.

After leaving Lehman, Lazares began looking for a new bank to buy.

He found troubled Domestic Bank of Cranston, R.I. in fall 2009, and closed on a deal to acquire the retail bank in the spring.

Lazares changed the bank's name to Admirals Bank in October 2010.

A year later, after a chance meeting with a Rhode Island tax attorney at a political fundraiser in Boston, Lazares decided to uniquely serve the affluent.

"Nobody feels as if they are getting good service from their bank," says Lazares. "We said: 'We are relatively small and relatively new. If we give [our customers] free ATM usage anywhere in the world; If our customers need to do banking by mobile phone; If they want to do internet banking; they can do that.'"

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Comments (3)
I read a story not too long ago about how "bespoke" is the new buzz word. It used to be reserved for tailored suits and is now everywhere. Nice to see that the trend hasn't bypassed banking. -- Robert Barba, reporter, American Banker
Posted by barrob | Thursday, May 31 2012 at 2:36PM ET
@barrob - agreed. This word has become hijacked and so over-used that it is now a joke. I am immediately suspicious anytime I hear the phrase applied to anything outside the world of tailoring.
Posted by Odin | Friday, June 01 2012 at 8:54AM ET
Hold on, guys... I think you are missing the forest for the trees... What's interesting here is that this bank is employing a new tactic to try and better serve its most profitable customers...

Sean Sposito, Reporter, American Banker
Posted by Sean Sposito | Monday, June 11 2012 at 11:19AM ET
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