Even in the face of real estate and transaction costs, bank branches are a critical tool to attract new customers—if only serving as expensive billboards for the company in a choice-heavy world.
"It's going to be very difficult, to convince people…that you're a major presence in a market and you're here to serve them if you don't have any physical presence," said Jonathan Larsen, Citigroup's global head of retail banking.
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Consumers rush to mobile apps for the simple transactions but still gravitate to the branch for the big-ticket transactions. Roughly 80 percent of all banking product sales are still closed at a branch, according to NCR, a transaction services company which advises many of the nation's largest banks.
JPMorgan Chase, for one, said 70 percent of its customers visit a branch once each quarter. For that reason, the bank said it would spend $1.2 billion—one of its biggest capital expenditure items in 2013—to open hundreds of new branches, all while investing in technology to shoulder the burden for routine transactions.
Case in point: Nearly all of the bank's 17,000 ATMs are deposit-friendly, and its app universe now allows mobile payments through Chase QuickPay – in addition to a real estate app resembling Zillow. But when a customer finds a home, they'll come to the branch for the mortgage: A higher-end, and therefore higher-return, advisory service.
A similar makeover may be required at, Wells Fargo. At 6,200 branches, Wells Fargo boasts the most storefronts of any financial institution. While it intends to grow, the "boring" bank is facing pressure to shift its strategy. Some 80 percent of transactions have migrated away from the branch and are now done on mobile phones, at the computer, or via ATMs, according to Jonathan Velline, the bank's executive vice president who runs their ATM and store strategy.
When endeavoring on any strategy shift, Velline has a thin tightrope to walk for this reason: its customers still expect the branch to be there, even if they only use once or twice every year.
"Seventy percent of our customers will visit Wells Fargo, talk to a teller, talk to a banker in any given six-month period," Velline told CNBC. "So our customers are still visiting us on a very regular basis."
Others, like Bank of America, are in retreat. The Charlotte-based bank is the nation's second-biggest, but bloated costs led it to shutter more than 250 branches just in the last year. Evidence of the stakes in the branch war, Bank of America's main hesitancy in selling the branches came from not wanting the real estate scooped up by a competitor.
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Then there's Citigroup—at only 1,000 branches in the U.S., Citi's footprint is child-sized compared to its aforementioned domestic rivals. To make up for its relative lack of real estate, it's refocusing on high-density, urban centers—not just in the U.S., but across the globe. In other words: The most expensive real estate on the planet.
The Hong Kong-based Larsen is currently overseeing a strategy refocusing on high-traffic, urban centers—away from the all-costs expansion of the days of yore.
"We're talking about the top 150 cities in the world," Citigroup's Larsen said in an interview with CNBC. "We're talking about New York. We're talking about London. We're talking about Tokyo. We're talking about Mumbai," These are really expensive places." (Larsen, however, would not comment about the fate of its much-discussed retail franchise in Mexico, which some analysts are pressuring the bank to sell or spin off.)