business news in context, analysis with attitude

by Kevin Coupe

The Washington Post has a story this morning about how bank tellers may end up being the next blacksmiths and buggy whip manufacturers.

One indicator: "Bank of America has opened three mini-bank branches­ since the new year that have ATMs and video­conferencing but no people. Two opened in Denver and one in Minneapolis.
In addition to the ATMs, the new robo-banks - called automated centers - allow customers to make a video­conference call to a Bank of America employee at another location to discuss more complicated money issues."

Robo-bank customers “can have a one-on-one conversation to get a mortgage, plan for retirement, open a small business or get a car loan,” according to Bank of America spokeswoman Anne Pace. “This is just a test. We haven’t rolled these out extensively. We are going to see how these go, see what we learn and make a decision from there.”

The new branches, the Post writes, "are part of a revolution in U.S. banking in the past few years as companies seek to save money by reducing the number of branches — and tellers and managers. Banks also are attempting to stay current with technology, which is moving toward handheld devices ... Robo-banking is also part of Bank of America’s strategy to expand its presence into harder-to-reach areas. At a fraction of the size of its traditional branches, the robo-banks save on real estate as well as personnel."

In addition to potentially saving on labor and real estate costs, the new robo-banks also seem to be a recognition of demographic shifts. To the millennial generation, bank tellers must seem like some sort of quaint anachronism, and that attitude isn't likely to lessen with age. Like every business, banks have to adjust.

In fact, the Post writes, it is likely to accelerate: "Bank of America is working on voice recognition technology called Erica (as in Bank of Am-ERICA) that will allow people to do virtual banking by voice with a computer, much as people use Amazon Alexa to order books or Apple’s Siri to ask questions on an iPhone."

It'll be an Eye-Opener.
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