PHOENIX - Bricks and mortar - and even infrastructure - are making a comeback, if the speakers at American Banker's Best Practices in Retail Financial Services conference this week are to be believed.

Bankers said they are learning to appreciate all the trappings their industry brings to the Internet economy - huge customer bases, trusted brands, established procedures, and, yes, even branches. They said they are adapting to the changes being wrought by the Internet, just as they adapted in the past to changes like interstate banking and the advent of automated teller machines.

"In the end, we made the most of those opportunities, and we'll make the most of the Internet," said Jerry A. Grundhofer, president and chief executive officer of Firstar Corp.

Branches emerged as workhorses for selling accounts, particularly the on-line ones that every institution covets. Jason Ward, e-business director at Wachovia Corp., said a recent effort to get branch employees to sell on-line accounts resulted in 25,000 to 30,000 sales a month, compared with 6,000 to 7,000 before the promotion. Similarly, a week after training its employees, Royal Bank of Canada boosted Web account sales from 1,000 a week to 11,000 a week."The branches are the main way of selling on-line accounts," said James T. Rager, vice chairman of Royal Bank.

Even customers who browse for products on-line are likely to turn to branches. Wells Fargo & Co. found that an "amazing" 80% of Internet customers go to branches to purchase products, said Jon R. Campbell, Wells' regional president in Arizona.

Traditional branches have been threatened before and held their ground, Mr. Campbell noted. "My sense is that supermarket banking was the first test of traditional stores," he said.

Learning to make the most of emerging channels has proven more crucial than choosing one or another, Mr. Campbell said, adding, "we're just in the next phase of that" with the Internet.

Despite bank consolidations, the number of branches continues to rise by about 2% a year, said Firstar's Mr. Grundhofer. And despite the industry's many call centers, ATMs, and Internet sites, branch transactions have remained stable over the past few years, he said.Firstar is nonetheless altering its approach. Of 52 branches it opened in 1998, only three were traditional. The rest were built "where people already are," in grocery stores, corporate lobbies, hospitals, even the Kentucky Derby racetrack, Churchill Downs. Firstar now has about 120 branches in grocery stores, about six times the number it had four years ago.

Kenneth D. Lewis, president and chief operating officer of Bank of America Corp., said his bank closes about 300 branches a year, but opens about 70. "As much as people talk about the demise of branches, it still is where so many customers go to open that first account," he said. About 80% of Bank of America's on-line banking customers still use the branches, he added.

"I go into this century very humbly because I don't think we know all the answers," Mr. Lewis said. "Through the Internet we can get picked off, and our best pieces of business can get taken away from us." Because of the general uncertainty, Bank of America will be making "some side bets on a lot of things," he said.

Mr. Lewis expressed ambivalence toward "screen scraping." In this controversial practice, a third party aggregates all of a customer's account-related information - usually by pirating it from other sites - and posts it, usually on a nonbank Web site. "I'm really torn," Mr. Lewis said, because banks finally have gotten to the point where, thanks to regulatory changes and greater marketing expertise, they are able to become the aggregators of a great many products and services. "This is our day to get that business back," he said. "At the same time, customers are demanding aggregation."

Chase Manhattan Corp. is using the Internet to get more out of its legacy systems and businesses, said Dennis Kosovac, senior vice president. The Web has been a boon to Chase's deep-discount brokerage business, Brown & Co., which has served self-directed investors, mostly over the phone, since 1960.When Chase introduced Internet trading to Brown customers in 1998 and reduced order commissions to $5 a trade, the number of trades a day zoomed to 25,000 from 8,000. By the end of 1999 it had hit 49,000 a day, and through the first two weeks of March daily volume was about 65,000, Mr. Kosovac said.

By bringing the convenience of the Internet to an established base of self-directed users, Brown has become one of a handful of profitable on-line brokerages, Mr. Kosovac said. The unit approached $100 million of pretax profit in 1999, he said.

"We all have such assets," Mr. Kosovac said, referring to the brokerage's established customer base.

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