Bucking the electronic banking trend, Citizens Financial Group of Providence, R.I., has put branches at the center of its retail strategy.

The $30 billion-asset company said it needs the branch focus to meet its goal of doubling the number of bank products each of its customer households uses, to an average of five, by 2001.

"The branch is the hub of our operations," said Michael J. Formica, vice chairman for retail operations. "We really believe it all happens there."

Other institutions have put similar importance on the branch, developing broader roles for staff members as sales representatives. The former Norwest Corp., for example, has been pushing branch-based sales for a decade, and as part of the new Wells Fargo it has its sights on a cross- sell ratio of eight services per customer.

Consultants said such programs help boost profits when targeted at customers who use branches frequently and who have bought multiple products.

"Cross-selling alone will not necessarily increase profits," said Les Dinkin of Oliver Wyman & Co. in New York. "But clearly, these programs can help target and retain a bank's most profitable customers."

Citizens is not ignoring electronic banking. It plans to add 120 automated teller machines by the end of next year, reaching a total of 450. It will also introduce a home banking product in early 1999. And it has 52 supermarket locations.

But Mr. Formica said Citizens' customer demographics support a branch- centric strategy. He estimated that the company's 1.6 million retail customers each use a branch about three times a month.

Citizens spent $10 million on the branch project this year. Part of that was for training 2,000 staff members. The bank is also installing lobby counters 15 feet from branch entrances, so employees can greet customers immediately.

Mr. Formica called this tactic "stand-up banking," and said initial testing shows it works. Almost 20% of people who passed the counters agreed to fill out a profile form. Citizens' telemarketers used the information to follow up with sales calls.

"Those customers produce a higher batting average than the ones without a profile," Mr. Formica said in a telephone interview. "We are doing everything we can to maximize the opportunity" to make sales in the branches.

Citizens also wants to make branches more inviting. All 100 offices are open from 9 a.m. to 3 p.m. on Saturdays, for example. Services such as express account openings have also proven popular, he said.

In addition, Citizens' call center has taken on more responsibility. New technology installed this year has afforded more telemarketing. Mr. Formica said about 70% of calls to branches are routed to the call center, to free up branch staff for customer interaction.

Mr. Formica said the industry's current love affair with remote banking services could lead some banks to miss opportunities to deal on a personal level with customers and win business.

"We get many more at-bats with the customer this way," he said. "We believe this is the way banking is going to be in the future."

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