As I see community bank after community bank spend all of their marketing efforts on Internet services, I wonder what happened to the old standby - the branch, and especially the branch manager.

In a way it is like the beginning of the school year at a college, when the upperclassmen and women forget their romances of the previous year and try to make time with the new students.

What is the function of the branch manager? In the past he or she spent an awful lot of time on credit evaluation because lending decisions were usually made at the branch. And of course, the manager was the final arbiter on all financial issues - almost like a combination judge, jury, and psychiatrist.

Now most bank executives feel they cannot ask one person to run the branch, know the customers, direct marketing in the territory, and make credit decisions. So credit matters have generally been forwarded to the main office or a regional center, and the branch people have been told to stress community service, especially on a one-to-one basis. When the branch manager has been empowered to handle all noncredit issues, the bank has usually thrived.

What special things can the manager do?

In some banks, he or she can set hours. Chemical Bank in New York, for example, once had a manager at the Fulton Fish Market office who opened his doors at 4 a.m. and closed for the day at noon because that was when the customers wanted to bank.

Chemical also had a policy that at busy times, like Fridays around noon, the branch manager would stand in the lobby with a big badge saying "See me first." Instead of waiting in line at the teller window, people with checks to cash would go to the manager. If the check was approved, the manager would put it in his pocket and pass out the requisite cash. After the lunch rush was over, he would reconcile the cash and checks in his pockets with the bank's books.

Branch managers have the job of making sure that the customers see the same familiar faces day after day. If you don't think this is important, look at what has happened to banks that were acquired and removed Suzy or Joe from the teller cages. Customers who felt they were no longer getting personal attention fled to community banks in droves.

We are in a banking environment in which more people have funds to invest and more and more dinnertime calls are coming from strangers trying to gain access to these funds. As banks get more involved in investment sales, who do you think will have a better chance of acquiring this money - the branch manager or the broker they don't know?

Community bank branch managers and platform employees may have to stand by and watch as the higher-ups invest tens of thousands, or even millions, and put all their chips on click banking. But just as October brings many collegians to their senses as they return to their old flames, more top executives are realizing that the best marketing weapon remains the branch.

And though Internet banking will not fade, it is important to remember that the branch manager isn't going anywhere, either.

If this were not the case, then why are so many new bank offices continuing to sprout? Commerce Bancorp in Cherry Hill, N.J., for example, has set a goal of opening 30 new branches a year for the next several years. Even Bank of America said last week that it is redesigning many of its branches to put a stronger focus on customer service.


Mr. Nadler, an American Banker contributing editor, is a professor of finance at Rutgers University Graduate School of Management in Newark, N.J.

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