Fidelity Investments branch on lower Broadway in Manhattans financial district offers a peek into a high-tech mode of reaching out to retail customers that few banks have been able to adopt so completely.
For example, checks are rarely deposited at a teller line. Slick machines suck in checks (no envelope needed) and spit out images of them as receipts. The data disappear from the screen as soon as the customer steps off the security mats in front of the checking machines.
Service desks are used mostly for triage situations, such as helping customers open new accounts or resolve problems. Customers are encouraged to use the telephone and Internet kiosks set up about the branch to get information about their accounts and make trades.
It is a sophisticated, no-nonsense service approach that has been tried by banks but not always with success.
Perhaps the most dramatic bungle was First Unions Future Bank, a $450 million plan to transform more than 2,000 branches into sales-oriented consumer centers with automated teller machines, telephones, and video kiosks replacing some interpersonal functions.
The plan, intended to boost profits, instead resulted in revenue shortfalls, customer backlash, and an acknowledgement from the companys president that service had slid below acceptable levels.
Tom Cmejla, senior vice president in charge of Fidelitys investor centers, said he was not familiar with the Future Bank program, which has undergone some revisions, including more staff training and the addition of employees at financial centers.
Fidelity, which has converted about one-third of its 77 branches to high-tech outposts, is on a roll. It opened the first of its technologically advanced branches on San Franciscos Market Street in August 1998, and the company plans to have all its branches converted by yearend.
The companys goal is not to make customers so comfortable with the Web that they no longer need to visit branches, but to integrate the telephone, Internet, and branches to offer the most options possible, Mr. Cmejla said. Our long-term goal is to make sure that however the customer wants to work with Fidelity, were able to provide the services necessary for them to do that.
Another goal is to make the investor centers destination sites where customers can take care of financial business, catch up on the markets, attend seminars, or plug into the research available on the companys Web site, he said.
The branch for us is really our local presence, our street presence, which offers the customers an opportunity to find out whats going on, Mr. Cmejla said. Because so much of what were doing focuses on the lobby, if the customer comes in and wants to spend more than just a couple of minutes following up on their transaction, thats perfectly fine with us, because we now have a different model.
In designing the branches, much thought was given to a critical question, Mr. Cmejla said: Why would customers want to visit a branch when the Web is increasingly accessible to many people?
One of the answers, Mr. Cmejla said, was that many employers dont want workers conducting personal business on company time. The converted branches enable customers to do daytime business on neutral ground.
And for some customers, the Internet simply cannot fully replace face-to-face interaction, he said. You still have a lot of people that like to go into a bank. There are still a significant number of our customers who want to be able to have the connection of a live person, so they really get both.
The branches are not necessarily people-intensive, but that does not mean that less customer service is available, Mr. Cmejla said.
Edmund M. Laskowski, branch manager at the Broadway location, said the traditional Fidelity branch calls for about six employees behind the counter and one up front. In the new branch, the order is reversed, with a couple of employees behind the counter and the rest drifting around, ready to offer assistance.
Customers are not just left to hunt through without any knowledge, Mr. Laskowski said. Its still a very interactive environment.
The approach seems to be working. Mr. Laskowski said the branch is frequently busy and draws regular customers, including a woman who comes in three times a day to use the machines.
People love it, he said. Ive gotten rave reviews.
Peter Davidson, senior executive vice president of the Atlanta consulting firm Speer & Associates, said Fidelitys function as a brokerage may give it certain advantages that First Union lacked.
Fidelitys branches serve primarily as sales offices, while bank branches are designed more as customer service outlets, making the infusion of technology more complex, Mr. Davidson said. First Unions planned overhaul of 2,000 branches many more than Fidelity has meant higher infrastructure and distribution system costs, he said.
Additionally, First Union did not adequately research how customers would react to the changes, Mr. Davidson said. Instead of enticing them to do things differently, it foisted the new approach on them, he said. Customers didnt appreciate it, and voted with their feet.
Eric J. Rajendra, global head of management consultants for the e-finance practice at A.T. Kearney, said the method of implementing new technology makes all the difference when dealing with a consumer audience.
Attempts to increase technology at the branch level typically fail because of inadequate training, rushed implementations, and customer resentment over being pushed to use machines while being solicited for sales, he said. Theres a conflict of message, even to the employees.
Fidelity, whose customers tend to be more sophisticated than the average banking customer, may well succeed where others have not, Mr. Rajendra said. If the company can educate customers and prove that the changes mean better service, banks may well have reason to worry, he said.
Banks already have seen competitors whittle away at the savings and the investment and credit markets, and core banking services such as mortgages could be next.
I could see a slow migration of the core banking products to players like Fidelity and others, he said. If this is pulled off, the banks risk losing the one remaining source of advantage, which are the transactional products and services. When the banks lose control of the transactional products and services, they risk losing control of the customer franchise that they have.
Leading a visitor through the Manhattan branch, where a wall-mounted ticker displays stock prices and large screens broadcast business news, Mr. Laskowski stopped first at the automatic check deposit machine that can allocate checks into numerous accounts instantaneously.
Nearby is a discovery kiosk, with stations where customers can touch a screen and view information from the companys Web site.
A cluster of phones provide access to the companys 1-800 numbers. Fidelity customers can head directly to the trading kiosk, where touch screens can be used to trade stocks and mutual funds.
For those who prefer a more traditional approach, business can be done the old way without a computer at a full-service counter. If privacy is a concern, there is a trading station in the back of the branch, away from other customers.
We look at it as the best of both worlds, Mr. Laskowski said. Where the customer wants to be is where we put them.
