Jonathan Velline makes an impassioned case for maintaining a local presence in customers' neighborhoods.

"If you think about the lives of our customers, they're not shut-ins. They get out to work, to shop, to play," said Velline, head of store and ATM strategy at the $1.69 trillion-asset Wells Fargo, during a recent visit to American Banker. "We're part of a customer's traffic pattern. We're not just going to be a bank that's at the other end of a call center. We're going to be in the community, we're going to be volunteering in that community, investing in that community, and we hire from that community."

Wells Fargo has 6,200 branches, or as its employees unfailingly call them, "stores." That number has held steady for the past three years. As recently as two weeks ago, you might have said the fourth-largest U.S. bank was bucking a trend, as its chief competitors, Bank of America and JPMorgan Chase, have been shrinking their branch networks. But this week, the FDIC's latest numbers show that per-capita, the number of bank branches in the U.S. has been growing. And Bank of America, JPMorgan Chase and U.S. Bancorp have been quietly setting up new branches in some metropolitan areas.

Even so, Wells Fargo's commitment to its branches stands out in an industry whose customers are shifting more of their banking activity to mobile devices and PCs, and where banks take an increasingly ruthless look at branch performance numbers.

At the same time, the bank is building interesting technology connections among its branches, mobile and online banking apps, ATMs and call centers, to route information from one to another. In so doing, the bank is becoming one of the first to provide customers with an ongoing, seamless dialogue across channels. Westpac New Zealand, for instance, has built an "omnichannel" that provides the same experience, look and feel across smartphones, tablets, PCs, smart watches and smart TVs.

"A small, but growing number of banks are looking beyond simply migrating transactions to the digital channel and thinking about engagement," said Bob Meara, senior analyst at Celent.


"Our stores are so central to the communities they serve... that we can't imagine not having that," Velline said. "Why would we take that away when it's such a strong part of the value we're delivering?"

It's not that the bank is nostalgic, assures Brett Pitts, Wells Fargo's head of product in the bank's virtual channels group.

"We're very numbers-driven. We're constantly looking at traffic and business results to make sure we're making rational business decisions," he said. "Rational business decisions still dictate having a strong physical presence; it's still a significant competitive advantage for us."

Pundits such as David Birch of Consult Hyperion and Brett King, founder of Moven, tend to look at bank branches as relics on the verge of obsolescence.

"I can see the point that there may be opportunities for different niches within the market and it is entirely plausible that there may be some demographics in some communities that can be profitably served through a branch network," Birch said. "And I also accept that there may be less tangible reasons for maintaining branches in order to demonstrate physicality and pass on key marketing messages. However, given the sophistication of digital channels and customers' obvious preference for the mobile phone as a primary financial services channel, I suspect that economics will dictate a trajectory around fewer branches, fewer standalone branches and more shared service points."

Pitts and Velline say their branch-friendly stance is backed by numbers. In any given six-month period, 85% of Wells Fargo customers visit a branch. "They're getting some value from it or they wouldn't visit. We feel we need to follow the customer," Velline said.

Even millennials can be found among the branch-goers, they say.

"As an industry, we're fixated right now on millennials," Pitts said. "I think we overgeneralize what millennials want and how different millennials are from other types of customers. I think we over-ascribe things to age that may be about life stage. The majority of millennials are still forming their financial relationship with us in the stores."

Apple and (reportedly) Amazon are setting up new physical stores, Pitts pointed out. "They are opening up physical locations because they also see, despite where they started, despite who they think their customers are, that there is value in a physical presence," he said.


The digital bridges Wells Fargo is building between channels kick in at the customer's first visit to a branch.

During what's typically a 40-minute meeting (30 minutes discussing the customer's financial needs and 10 setting up an account), the banker will set the customer up on a mobile app and make a mobile deposit if appropriate. The banker might also walk the customer over to an ATM to show how to make a deposit there.

"There are all these connections between what we used to think of as separate channels," Velline said. "Our bankers are really attuned to that. They're not thinking about mobile being something else. They see mobile as part of the service they deliver."

Wells Fargo has considered letting people open an account straight from a mobile device, a feature other banks have begun offering. But it has not embraced the concept yet, with reason: 85% of new account sales still occur with the store.

Branch employees are equipped with tablets, which communicate with nearby ATMs. When a customer is doing a transaction at an ATM and runs into a problem, a team member is alerted on the tablet. Once the banker has helped the customer and taps "approve" on the tablet, the ATM dispenses the cash, or does whatever else it's supposed to do. (If the customer happens to leave a card in the ATM, the machine sends the customer an email. One ATM sent a customer an email saying, "You left your card, come back to get it." The customer responded, "No, I didn't." Then 20 minutes later he responded, "Yes I did. Don't tell my wife I'm an idiot," Velline said.)

Another cross-channel technology the bank has built is customer event history, which lets phone and store bankers see a trail of events in the customer relationship, so they can pick up the conversation where the last interaction left off.

In its mobile apps, the bank is testing the ability to take a photo of the code on the back of a driver's license to prefill account information. If that proves to be useful, it will be incorporated into other channels, Pitts said.


Wells Fargo now has 24.8 million active online customers, up 8% year over year, and 14.1 million active mobile customers, up 19% year over year.

As it builds and refines its digital channels, the bank keeps its branches in mind. "Digital doesn't supplant the store, it complements it," Velline said.

"We're seeing a lot of blurring of technology and experience, it's becoming more of a continuum," Pitts said. "We started years ago with light integration, offering texting and emailing receipts from the ATM to the mobile device, but there's so much more we can do around transactions, starting things in one place and picking them up in another."

Today the bank can track customer interactions across ATM, mobile, branch, and online banking through analytics, after the fact. It's working on the ability to do real-time handoffs, so that, for instance, if a customer is using the mobile app and encounters a problem, he can click to speak to someone, and that customer service rep will automatically receive a record of everything the customer has just been through and be able to greet him by name and provide informed help.

In another example of "light integration," the bank offers an appointment booking tool online customers can use to set up a face-to-face meeting with a banker.

And when it built remote deposit capture into its mobile apps, the bank used the same technology it uses for envelope-free deposits.

"That's our ideal, building technology that's truly a shared unit as we either modernize platforms or build new platforms," Velline said. "Our tech teams are building it as a shared unit. For us, it's not just the benefits of the experience it delivers but also [the ability to] build once and reuse."

Like some other banks including Westpac New Zealand, Wells Fargo is turning to responsive design to support that shared platform.

"We're in the midst right now of replatforming all our digital capabilities onto a single architecture that enables us to do the same sorts of responsive design," said Pitts. "That doesn't mean we're going to have the same design across all devices. There's an intentional familiarity we're going to have across all devices because we know customers use multiple devices and it doesn't make sense for the jarring transition from a desktop experience to a tablet experience to a phone experience." There are differences in what customers want to do on a tablet versus a desktop or a phone, so the bank is trying to tailor its presentation to each device, he said.

At the same time, it's important to try not to reinvent the wheel. "It's hard. We're all under a lot of pressure right now to launch lots of features," Pitts said. "We're very competitive about getting new features out there and a lot of banks are starting to incur technical debt by launching quickly across a bunch of different platforms that, two to three years from now, are going to require a painful rationalization exercise. If you want to make a product change and you wind up needing to do it on three or four different product architectures, it gets really expensive and it slows your time to market."

Wells Fargo has already launched a tablet app on the new architecture. Throughout 2015 and 2016 it will completely resdesign its desktop and smartphone experiences, Pitts said. "We'll all be converged on the same architecture, in concert with completely holistic redesigns," he said.

The new designs will include more imagery and simpler navigation.

Recent reports have suggested that banks are investing in mobile banking at the expense of keeping their websites up to date.

Pitts noted that mobile has been a fast-moving space and that customers have high expectations. "There has been a priority placed on mobile and making sure we were moving that as quickly as we possibly could," he said. "But I think people do that at the expense of desktop experiences at their peril." The vast majority of Wells Fargo customers still use their desktop PCs for banking, he said.

Penny Crosman is the editor of Bank Technology News and technology editor of American Banker.

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