In the latest move to scale back its branches, Bank of America is ending drive-up teller service at some locations, including in the Charlotte region.
The reason? Too few people are using the drive-thru lanes, the bank says.
The move comes as the Charlotte-based lender is in cost-cutting mode, closing branches nationwide and shrinking its number of automated teller machines.
This month, the nation’s second-largest bank by assets closed drive-up lanes at two branches in Mooresville and one near Lake Wylie. Next month, the service will be discontinued at three more branches in the metro area.
The strategy also impacts Bank of America branches across the country, from Atlanta to Detroit to Houston.
Some customers are not happy with the change. David Molter, 83, said he began researching nearby community banks after learning about the lane closures at his Lake Wylie-area Bank of America branch.
“I’m distressed,” he said. “I think it’s a bad decision.”
Miami-based banking consultant Ken Thomas said it’s an unusual move for Bank of America, which typically closes an entire branch, rather than just eliminating the drive-thru teller service.
Thomas said it’s more expensive to operate a branch’s lobby, which employs more people than the drive-thru teller service. “You sometimes see the opposite, where they’ll close the lobby and keep the drive-in open,” he said.
But the bank says there’s not enough demand to justify continuing the service.
Bank of America spokeswoman Nicole Nastacie said drive-up teller service is being discontinued at branches where use of the service is low. But customers will continue to have 24-hour access to drive-up ATMs at the impacted branches, she said, adding that only a handful of branches in the Charlotte area are losing the service.
“Decisions on drive-up teller service will continue to be made based on location and volume,” she said.
Nastacie said the tellers who worked the drive-up lanes will not lose their jobs. She added that installing ATMs in those lanes is “a possibility.”
Industry in flux
The banking industry has been going through a revolution, driven by the rise of online and mobile technology. Customers can get their banking done on computers and smartphones, eliminating the need to go to a branch. And newer ATMs allow customers to deposit checks and cash without envelopes.
As their customers’ habits are changing, banks are reacting, redesigning the look and feel of branches. Banks have been equipping new branches with fewer tellers than in the past but adding more technology and lending specialists.
Bank of America has been closing branches nationwide as part of its Project New BAC, a plan that calls for the bank to save $8 billion a year by mid-2015. The bank has about 5,300 branches, down from about 5,700 two years ago. It aims to have 5,000 by the end of next year.
In 2011, the bank had 17,800 ATMs. Now, it has approximately 16,350.
Industry observers and bankers say Bank of America’s closing of drive-up teller service is symptomatic of an industry trying to figure out how to serve customers at a time when consumer behavior is ever-changing.
“We are seeing a lot more use of drive-up ATMs” that offer more bells and whistles, said Ed O’Brien, a director for Maynard, Mass.-based Mercator Advisory Group. That, he said, could be why there’s less demand for drive-up teller service.
As Bank of America eliminates the service at some branches, it’s also rolling out ATMs, unveiled this year, that allow customers to interact with a teller via a real-time video feed. Those tellers are stationed in call centers in Delaware and Florida. The ATMs are called Teller Assist and allow access to tellers outside of normal banking hours, including Sundays.
Despite the reduction in foot traffic to teller lines, bankers and industry observers say branches themselves won’t be going away in the near future. That’s because branches give banks the opportunity to sell products to customers and promote their brand.
Nancy Bush, a banking analyst with NAB Research, said Bank of America needs to be careful as it closes the drive-up teller lanes.
“Charlotte is a car town, just like Atlanta is a car town,” she said. “People are used to doing business from their cars.
“Everybody is trying all these different strategies,” she added, “and everybody else will be looking at it to see how it works.”
Some other banks say they do not plan to cut back on their drive-thru teller service. Wells Fargo spokesman Josh Dunn said the San Francisco-based bank has no plans to do so. The same goes for Park Sterling Bank, a community bank based in Charlotte, CEO James Cherry said.
Cherry said he expects to see a movement toward more drive-thru banking.
Also, it has yet to be seen what impact, if any, the changes could have on Bank of America’s Community Reinvestment Act rating. Under the act, large banks undergo reviews, every three years, to determine whether they are meeting the lending needs of the communities, including low- and moderate-income ones, in which they operate.
Bill Grassano, spokesman for the Office of the Comptroller of the Currency, said the public can file comments with the regulator to explain how they are being hurt by changes a bank is making. Those comments go into a bank’s CRA record and are considered as part of a bank’s CRA examination, he said.
Bank of America would not have to notify the OCC of the drive-up teller lane closures as long as the branches they are connected to remain open, Grassano said.
‘What is the point?’
Molter, a Lake Wylie-area resident, said he learned in July that the change was coming to his primary Bank of America branch at 5342 Highway 557. Drive-up teller service was discontinued there Aug. 5.
Not even the $50 Olive Garden gift card Bank of America gave him after he complained about the lane closures was enough to persuade him to stick with the bank.
Molter said he plans to close his Bank of America account, which he’s had for at least 10 years. He said he’s opened an account at Bank of York because of the change.
Molter, who describes himself as not tech-savvy, said he has problems with his knee, and getting in and out of a vehicle is difficult.
On top of that, he said, he doesn’t use ATMs. So the drive-up teller service was convenient, he said.
Although Molter’s primary branch is being affected by the lane closures, Nastacie, the bank spokeswoman, said the nearby Steele Creek Bank of America branch is being outfitted with two drive-up Teller Assist ATMs. Also, a walk-up Teller Assist ATM will be installed at the Steele Creek branch, she said.
Molter said it doesn’t make sense to him that his Bank of America branch is ending the service even though it is not laying off the tellers who worked in the drive-up window.
“If they’ve got the staff, … what is the point?” he said.
Although the bank says not enough customers were using the drive-up teller service, Molter doesn’t buy it.
“I always had to wait in line,” he said.
Roberts: 704-358-5248 Twitter: @DeonERoberts
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