NewHavenBIZ

18 n e w h a v e n B I Z | M a r c h 2 0 2 1 | n e w h a v e n b i z . c o m F O C U S : B a n k i n g & F i n a n c e Pandemic shis bank branch and tech strategies into high-gear A More Virtual Reality By Michelle Tuccitto Sullo T he coronavirus pandemic has fast- tracked banking habits and trends that many in the financial industry thought would be years away. Customers who only wanted to do their transactions at branches have over the last year increasingly tried digital tools for the first time, and learned they prefer them. A decline in in-person transactions means less need for brick-and-mortar branches. While New Haven area bank- ers don't foresee branches disappearing entirely, they do think more will close, and the ones that remain will likely be further apart and have a different focus, such as for consultations on big financial decisions like retirement planning, homebuying or taking out a business loan. Even before the pandemic, the number of banks doing business in Connecticut and branches had declined. In 2010, there were 68 banks in the market, with 1,296 branch- es. By 2020, those figures had shrunk to 56 banks and 1,094 branches, according to Federal Deposit Insurance Corp. data. News of more impending closures have been making headlines recently. Bridge- port-based People's United Bank expects to close most of its branches inside Stop & Shop grocery stores in Connecticut and New York in the coming years. e bank, which also recently announced it is being acquired by New York-based M&T Bank for $7.6 billion, indicated it will use the money it saves to invest in digital — in- cluding online banking and its mobile app. Waterbury-based Webster Bank has announced plans to consolidate branches across southern New England, including 14 closures in Connecticut. In the New Haven region, these include branches in Cheshire, Hamden, Oxford and Bethany. TD Bank plans closures too — six in Connecticut, including branches in West Haven and Woodbridge. Liberty Bank, which is headquartered in Middletown and has about $6.8 billion in assets, currently has 59 branches in Con- necticut, and recently closed one in Shelton. David Glidden, president & CEO at Lib- erty, said there aren't currently plans to close more specific branches, but he anticipates there will be fewer over the next couple of years — a trend he believes will happen industry-wide. "ey will likely be smaller, and geared more toward advising services," Glidden said. "Most customers want a branch close by if they need advice or have a problem." Liberty has seen a significant change in customer habits due to the pandemic. e bank saw a 54 percent increase in mobile and online services last year, and an 18 percent increase in ATM use. Meanwhile, in-branch deposits were down 22 percent, according to Glidden. Prior to COVID-19, there was a segment of customers who resisted online banking and preferred to visit branches, he noted. "We saw a lot of these people, either nudged or forced because of COVID, using digital and online channels," Glidden said. "We think that will continue. Once every- thing is back to normal from COVID, we will probably see more branch volume, but I doubt it will ever be the same. As people get more comfortable with using online tech- nology, I don't see them coming back." Because of this trend, Liberty is investing in enhancing the online and mobile experi- ence for customers. "We want people to feel like they are get- ting a five-star experience on our website," Glidden said. "As people's comfort with online banking rises, their expectations also rise." Filling a void Not all area banks are focused on closing or consolidating branches. Many smaller ones, which are experiencing similar trends in digital use, are adding branches, oen filling voids le by others' departures. Guilford Savings Bank opened a new branch office in North Haven in early March. It is a westward expansion and seventh location for the bank, which also has six full-service banking centers in Old Saybrook, Madison, Guilford and Branford. GSB has roughly $944 million in assets. Bank President and CEO Timothy Geelan said GSB is also looking at heavier invest- ment in digital and mobile technologies, "because the pandemic forced it." Technology and innovation once on the horizon have been "pushed up big time," according to Geelan, who also believes pandemic-related consumer behaviors will remain aer it is over. Customers forced to use digital and mobile technology because of the pandemic have been "pleasantly surprised," by how easy it is, Geelan said, and use of these tech- nologies has accelerated. People are becom- ing accustomed to managing their finances, and checking balances and transactions on a daily basis, instead of waiting for monthly statements. "But we feel branches are part of the equation, and we pick our spots," Gee- lan said. "I don't think brick-and-mortar branches are going away. ere are folks out there that think they will. But I have a tough time seeing it myself." e physical presence between banker and customer in a branch helps "build trust," he said. Kyle Eagleson, GSB's chief financial offi- cer and first executive vice president, said the bank's service model will always require some branches, though there may be larger distances between them. GSB has changed its vision and mission to be a statewide bank, and is becoming more focused on digital tools, he said. Its branches can serve as engagement and education centers. "I think the branches can serve as edu- cational points for those who are less tech savvy — where we can do demonstrations of our digital products," Eagleson said. "You don't need to take your check to the bank anymore, you can take a picture of it. Not everybody is fluent in that type of technol- ogy." Digital banking tools offer convenience, but have historically been underused, Ea- gleson said. Making bank transactions with your phone, checking balances, transferring funds between institutions, sending money to a friend, cashing checks remotely, scan- David Glidden, president & CEO at Liberty Bank in Middletown. PHOTO | CONTRIBUTED PHOTO | GARY LEWIS Guilford Savings Bank President and CEO Timothy Geelan.

• Cover