A debate has been brewing for years over the obsolescence and fate of the traditional bank branch as more and more transactions are processed online.
One of the biggest movers and shakers in the financial services world isn’t ready to write off its brick-and-mortar network. Not by a long shot.
Last week, JPMorgan’s Chase consumer banking unit was putting the final touches on its first retail location in the Charleston market — and just its second in South Carolina — as part of a national expansion announced two years ago.
The last among the U.S. megabanks to plant its flag in the Palmetto State was Wells Fargo & Co., which arrived courtesy of its buyout of the wounded Wachovia franchise in the heat of the 2008 financial crisis.
Chase is taking a different approach, relying on a local organic growth strategy rather than mergers and acquisitions. To date, it has filed plans with federal regulators to open a dozen South Carolina branches, spread mostly between the Charleston and Greenville markets. One outlying office is planned for Rock Hill, near Charlotte. Most will be built from the ground up.
An official opening date had not been publicly announced as of last week, but the first Lowcountry location — a newly constructed full-service branch at Johnnie Dodds and Anna Knapp boulevards in Mount Pleasant — is expected to start taking deposits and making loans soon.
South Carolina had been largely off JPMorgan Chase & Co.’s radar until mid-2018, when it unveiled plans to open a commercial loan office in downtown Charleston to court small and mid-sized businesses. Savannah also was part of the rollout.
“Both cities have seen significant population and business growth over the last several years and their seaports help fuel their states’ economies,” a company executive said at the time.
JPMorgan Chase CEO Jamie Dimon announced his 400-branch expansion plan in 2018. File/AP
The bank’s Meeting Street office isn’t a retail branch. Instead, it caters to corporate clients based on whether their annual revenues are above or below the $20 million mark. The response has been “phenomenal,” said Beth Russell, Charleston business banking area manager.
The New York-based lender’s expansion into the consumer side in Charleston seemed likely based on the path Chase took in the Upstate, where it opened a small loan office before greenlighting a full-blown branch. The Clemson location opened last year, reflecting the bank’s strategy to court young college students and cultivate what it hopes will be lifelong relationships with them.
We’re starting a weekly newsletter about the business stories that are shaping Charleston and South Carolina. Get ahead with us – it’s free.
JPMorgan Chase CEO Jamie Dimon is spearheading the retail expansion. His goal is to put the global financial services giant within striking distance of 93 percent of the U.S. population, largely by adding branches and filling out its already sizable footprint.
His plan called for opening 400 locations and hiring as many as 3,000 employees in about 20 new markets by 2023. Last year, the focus was on nine high-growth cities where Chase is a latecomer, including Charlotte, Raleigh and Nashville, Tenn.
Company finance chief Jennifer Piepszak provided an update in the second-quarter earnings call, prompted by an analyst who mentioned the COVID-19 pandemic and asked her and Dimon if they had “learned any lessons that might change your thoughts on the branch network, on your organic growth efforts, as we go forward and come out of this some day.”
She began her response with, “we’re learning a lot.”
“But we haven’t learned enough to make any changes to our strategy around branch expansion,” Piepszak continued. “In fact, we just opened our 100th branch in market expansion. So we’re really excited about that. We think we’ll open probably another 75 this year. So we’ll be nearly halfway to the 400 branches that we’ve talked about … . And so we’ll see.”
The 75 openings will include the new office in Mount Pleasant, an affluent suburb that’s become one of the most crowded and competitive banking markets in the state.
Chase isn’t starting from scratch in Charleston and other parts of South Carolina, Russell said. It already has a following from previous customer relationships it had forged with recent transplants, part-time residents and businesses.
While ATMs, smartphone apps and other modern-day conveniences have eroded walk-in traffic, Chase feels the old-school brick-and-mortar approach is still an important tool in recruiting and retaining customers.
Among other considerations, branches help create and elevate what marketing experts call “brand awareness” with consumers. At the same time, they represent a long-term commitment to a community, according to Russell.
“And some people still just want to come inside,” she said.
Contact John McDermott at 843-937-5572 or follow him on Twitter at @byjohnmcdermott