Bank tellers may be the next blacksmiths

Technology changes industry; branches can expect limited future.

Self-driving cars. Self-serve gas pumps. Self-checkout supermarkets. Add self-banking to that list. No people. No tellers. Nobody greeting you with “How is your day going?” Although, that may come from a machine — and sooner than you think.

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.

“This is the beginning of the end of the American bank branch,” said Peter Fitzgerald, a former U.S. senator from Illinois, lifelong banker and founder of Chain Bridge Bank in McLean, Va. “Bank branches are dead. They were killed by the iPhone. It’s like the horseshoe when the automobile came along.”

According to figures compiled by the Federal Deposit Insurance

Corp. and supplied by the American Bankers Association, the number of U.S. bank employees has remained relatively stable. There were 2,110,276 employees in 2012, and 2,043,480 last year.

But the number of U.S. bank branches has declined precipitously from a peak of 99,540 in 2009 to 91,861 in the third quarter of 2016, according to the ABA.

Bank of America spokeswoman Anne Pace said live banking isn’t disappearing. About 1 million people a day walk into one of Bank of America’s 4,597 locations and interact with bank employees. But the number of locations is down from 5,900 six years ago. The company has 16,000 automated teller machines.

The 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,” she said. “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.”

Pace said the new banks are not replacing existing locations. She also said Bank of America is adding 50 to 60 traditional centers.

Word of the new robo-banks leaked out at a Credit Suisse conference in Miami recently during a question-and-answer session with Dean Athanasia of Bank of America’s consumer banking unit.

There are no layoffs accompanying Bank of America’s robobanks, but the new branches 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.

“Cash is dying out,” Fitzgerald said. “Many millennials don’t carry cash. They only use their debit card. In 2011 and 2012, bank branch traffic dropped precipitously. The last I checked, 98.5 percent of our bank’s transactions are done online and electronically.”

Robo-banking is also part of Bank of America’s strategy to expand its presence into harderto-reach areas. At a fraction of the size of its traditional branches, the robo-banks save on real estate as well as personnel.

Bank of America’s traditional branches run about 5,000 square feet. The robo-banks are about a quarter of that size.

“There is no one-size-bankfits-all anymore,” Pace said. “We have different centers based on different communities. We are taking some of that savings from mobile banking and reinvesting it into new centers, renovating others and hiring more specialists to provide advice and guidance to clients.”

But the days of the local teller hanging around to make change or cash checks have been replaced by technology designed to service more robust profitmaking centers such as credit cards, mortgages and even retirement advice.

“We are simply following our clients,” Pace said. “Mobile banking users increased to 21.6 million, and 19 percent of deposit transactions are done through mobile. That’s equivalent to 880 financial centers. We need to be there whether it’s through the mobile phone or inside a financial center.”

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.

The bank’s Merrill Edge investment service is also allowing customers to use a robo-advised platform to invest without speaking with a human.

Air fares have fluctuated during the time Southwest has been in Atlanta, due to various factors including initial route cuts and the growth of smaller discounters Spirit and Frontier at Hartsfield-Jackson.

But Southwest’s own impact on fares has been muted, in part because it simply replaced AirTran, rather than adding an additional competitor.

Federal data show Southwest isn’t always the lowest-priced airline on a route. Other airlines sometimes have lower prices.

“Anyone who has bought a ticket on Southwest knows that Southwest is no longer the lowprice leader in many markets,” McGinnis said.

While the airline built its national network around the “Southwest effect” of entering a city and lowering fares dramatically, “that has kind of gone away,” McGinnis said.

Southwest contends it has still brought down higher-end, lightly restricted “walk-up” fares that business travelers often pay.

“AirTran already had low fares on the low end,” spokesman Brad Hawkins said. “Where we have effected the most change on the Atlanta side is the walk-up fares.”

Focus on Atlanta passengers

AirTran, like Delta, had built a connecting hub in Atlanta that it used to concentrate and maximize passenger loads. Southwest does not operate a traditional hub-and-spoke model, and its focus in Atlanta has been more on “point-to-point” fliers starting