Chase Manhattan Corp. is broadening the skill set of its branch employees.

Addressing an American Banker conference here late Wednesday, Chase vice chairman Donald Boudreau said branches will remain an important vehicle for delivering retail products and services. However, for branches to remain relevant, employees must do more than take deposits and make loans, he said.

"We are training and licensing hundreds of branch staff to market insurance products," Mr. Boudreau said. "Branches will be around for a long time, but they are going to be doing different things."

By May the country's largest commercial bank expects to have trained and licensed 700 branch employees to sell insurance. The goal is to have 1,200 such employees by yearend. Chase plans to sell annuities and life insurance through branches in New York, Connecticut, New Jersey, and Texas.

"We don't want to be a bank," Mr. Boudreau said. "We want to bring it all together for our customers."

Some observers said that relying on bank employees rather than insurance agents is the most efficient and effective way to sell the product.

"Because agents expect such high commissions, using salaried employees makes delivering products much less expensive," said Princeton, N.J.-based consultant Kenneth Kehrer. "You can afford to offer lower-priced products and more of them.

"Chase is a real pioneer in this area," Mr. Kehrer added.

But Thomas K. Brown, a banking analyst with Donaldson, Lufkin & Jenrette, said banks should be cautious about adopting Chase's model. Though many profitable customers still use branches, "the trend is for less and less walk-in traffic. People aren't buying products through branches today," Mr. Brown said.

Chase also plans to train branch staff to sell mutual funds. The $366 billion-asset bank has 250 brokers in its branches. Regular branch employees do not sell these products now.

The push to train and license branch employees is slated to begin next year, said John J. Stack, Chase's executive vice president of marketing.

"Branch personnel are playing new roles as trusted advisers, adding value to our customers," Mr. Boudreau said. "We've got to provide (customers) what they're looking for in tailored, value-added packages."

Though Chase is putting renewed emphasis on the branch network, Mr. Boudreau said that 22 million of the bank's 25 million consumer customers have "no relationship with our branch system at all." The ones that do, he added, don't have much direct contact with bank employees.

"Many of our most profitable customers never step foot inside a branch," he acknowledged. "They've been very happy to do their business by phone, direct deposit, (and) on-line banking."

Because of this reduction in face-to-face contact with customers, Mr. Boudreau argued, it has become crucial for banks to predict which products and services are in high demand. Chase uses computer models to estimate the likelihood a customer will accept a specific product or leave the bank for a competitor.

Mr. Boudreau noted that once Chase identifies customers who are likely to, for example, refinance a mortgage, the bank preemptively calls and makes a refi offer.

"Gone are the days of hunkering down in the corner, hoping our customers don't notice that rates have dropped," Mr. Boudreau said.

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