A traditional bank's experiment in automated banking is showing signs of promise.
A branch that the $2.7 billion-asset PlainsCapital Bank opened April 3 in Lubbock, its hometown, features touch-screen computers at which customers can fill out applications for loans or personal or business accounts. It also has automated teller machines that scan checks and cash machines that dispense rolled coins and small bills.
The 2,000-square-foot branch is also unusual in that it shares space with a Starbucks near the campus of Texas Tech University.
David Seim, PlainsCapital's president, said the strategy is to target tech-savvy professionals and students while keeping overhead costs low.
It chose the coffee-shop location "because that is where you have traffic," he said. "Typically higher-net-worth individuals and young professionals frequent Starbucks."
In the branch's first two weeks more accounts were opened there -- more than 40 -- than at any other PlainsCapital branch in Lubbock, Mr. Seim said. He added that he stopped at 9:30 on a recent weeknight and was pleased to see that every seat in the branch was filled with students or young professionals.
"If we can get them into the bank then we have a better chance of selling them services," he said. "I like this idea a lot better than building a freestanding branch and hoping they come."Vicki Dalrymple, a PlainsCapital senior vice president, said two full-time employees are available weekdays from 8 a.m. to 5 p.m. for customers who wonder how a machine works or who just don't want to do their business on one.
But customers can use the machines every day from 5:30 a.m. to midnight, Starbucks' hours, Ms. Dalrymple pointed out. "Really, someone should be able to walk into that branch and service all of their banking needs."
If the mostly automated branch proves successful, PlainsCapital is likely to open similar branches in other markets, Ms. Dalrymple said. Austin and Round Rock are under consideration.
Tom Auer of NewGround Resources Inc. in Chesterfield, Mo., a planning and design firm for financial institutions, said PlainsCapital is testing the automated-branch concept on the right audience.
College-age consumers are "very savvy about downloading information and music from the Internet, using the self-checkout lane, and a variety of other interfaces that are self-directed and self-operated," said Mr. Auer, NewGround's vice president of architecture and engineering. "So when it comes to something like banking, I don't see any reason it would be different."
The machines PlainsCapital is using are not cheap, he said; a coin and cash dispenser, for example, can cost $30,000. But Mr. Seim said the branch costs only about half as much to run as a typical branch.
Mr. Auer said other banks use varying degrees of automation in new branches but still staff them with loan officers and tellers to develop or preserve personal relationships. PlainsCapital is "taking a leap of faith here, and I applaud them for it," he said. "I'd be curious to see how many loans they get. … It could turn banking on its ear if it is highly successful."
Other bankers are apparently curious as well. Mr. Seim said the president of a rival bank was recently spotted in the Starbucks branch.
