Business

B of A to convert some branches to 'specialty stores'

CHARLOTTE, N.C. —Bank of America is preparing to test some changes in its branches, letting customers videoconference with financial advisers and moving other advisers directly into the branches to make them more accessible.

In January, the bank will convert about a dozen branches in the Washington area and Los Angeles into so-called "specialty stores," and plans to eventually open more around the country.

The stores will have advisers, or specialists, who can offer advice on mortgages, investments and small business, either on-site or via video chat. That's a change from the current branches, where such specialized advice is more typically a "referral and follow-up" process, said Helen Eggers, the bank's customer segments executive.

"We've been acknowledging the changing customer environment," Eggers said. "There's a very explicit request for us to be able to deliver expertise when and where and how the customer wants to receive it."

It's also a good way to lock customers into multiple products with the bank.

"One, this binds the customer to the institution," said Steve Reider, president of Alabama-based Bancography, which advises banks on branch planning and other moves. "Two, it provides an income stream that is not dependent on what interest rates are doing.... Every bank is interested, at a time when margins are eroding, in sources of revenue besides loans."

Bank officials say the stores will help them leverage the capabilities of mortgage giant Countrywide Financial Corp., which the bank bought in 2008, and investment bank Merrill Lynch, which it bought in 2009. Though those purchases have brought challenges, they've also catapulted Bank of America into top positions in mortgages and investment banking.

The specialty stores will have prominent signs to let customers know about the changes. Customers will be able to make appointments online or by stopping by the branch, and if one specialist is busy, the customer can connect with another by videoconferencing.

Wes Wilhelm, a senior analyst at the Aite Group, said that the videoconferencing will let Bank of America use its staff efficiently. For example, if a branch has only a few mortgage inquiries each day, "you can't really afford to have two experts on staff waiting around for those people to walk in."

The challenge will be whether customers will be comfortable discussing their finances via a videoconference, Wilhelm said.

The bank doesn't have a firm timeline for when it will open more specialty branches, or what percentage of its branches will make the switch. Eggers said the stores will evolve based on what customers want —"not just a plan that we develop on our own whim," she said.

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