Citi Reopens Fairfax Branch – Los Angeles Business Journal

While many banks have reduced their physical footprints over the years, others are consolidating what they have.

Take Citibank’s Fairfax branch, which reopened its doors a week ago. Not a spartan post with a few tellers for quick transactions. The state-of-the-art office space includes the brand’s Citigold Lounge aimed at high-end clients with space for clients to work and host remote meetings. The department even works with wealth managers.

Why? Because new research shows that bank branches do not have to lose money as thought for a long time. In fact, some branches have outgrown their trading profits – and are attracting consumers wary of digital banking.

Lisa Deloney, president of the California market for New York-based Citibank, said she aims to put in “the right place for customers” rather than take the Starbucks approach.

“When customers come back to our website, they’re not necessarily looking for traditional banking, they’re looking for advice and guidance,” Deloney said. “One of the things we’re trying to do with this place is the feeling of, ‘We’re here for you when you need it’ – whether you need negotiation advice or sitting in the Citigold Lounge with a cuppa. coffee and do some work on the Internet.”

A research group published by McKinsey & Co. indicates that banks that have succeeded in the outbreak of the Covid epidemic are adapting to customers who have turned to digital services.

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And while there are obviously fewer branches than before, the branches we have are often doing more work – and differently than before.

Rethinking the vibe

Deloney said Citibank’s decision to invest in this space came down to one question: when customers come into the bank, what do they want?

“This place has been open for almost 80 years and in the last five years we’ve been thinking about what we want to say about the best corner in Los Angeles,” he said. “We knew we wanted to stay completely in this location, but we knew we needed to think and re-think what we could be in the Fairfax community.”

The 6,400 square meter space has been gutted and now has a modern and clean design and a restaurant that invites customers. It also includes the Citigold Lounge brand, which the company offers to some customers as a pitstop during hot days – they can grab a coffee and relax, use the device to recharge devices or work remotely or host meetings with other colleagues on the move.

Additionally, Citi has staffed the site with specialized staff, particularly wealth management advisors.

Citi’s renovated Fairfax location features an upscale Citigold restaurant.

“The need for wealth advisors is very important,” Deloney said. “When we come out of the epidemic, people are rich in many cases and they are looking for what to do.”

This type of investment in a physical bank branch may go against conventional wisdom.

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Since 2017, there has been a 20% reduction in physical banking locations in developed markets around the world – in that period, only 9% will be closed by 2021 – according to a McKinsey article published in the month of June. In addition, more than 40% of retail sales in core banks will be digital in these markets by 2021.

Growth leader

In Los Angeles County, banks that have reduced their footprint in recent years include household names like Wells Fargo and local brands like Bank of Hope, Cathay Bank and Hanmi Bank.

While many banks have experienced a decline in sales since the pandemic despite digital growth, McKinsey reports that growth leaders in these markets have increased sales by 10% in by keeping the division’s sales decline to single digits.

And around 37% of the physical branches analyzed will increase by 20% in 2021.

“In many banks, productivity is a sticking point,” the article said. “Sales per employee fell 25% from 2017, driven by a decline in simple products such as savings accounts, credit cards and personal loans. In contrast, sales of more complex products increased, such as loans. The main distinguishing feature of the bank is the ability of the bank to increase each position.”

According to McKinsey, the number of global bankers and advisers – such as wealth management professionals highlighted by Deloney – has increased by 48% in banks.

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“Although each institution had to arrive at a unique model for physical channels, a common theme emerged: the inversion of the distribution pyramid,” the article added. “Departments and call centers no longer dominate because all channels meet the needs of customers, allowing digital to perform part of the activity for part of the customer. For a growing number of people, the mobile phone has become a necessary tool, with physical channels becoming brand ambassadors. “

Here for the customer

Citibank’s expectations for the new and improved branch seem to be in line with this research. And to hear it from Deloney, many of the branch’s longtime customers have been seeking updates on when their facility will be open.

“What we’ve found is that our customer loyalty is very strong. Our customers have not abandoned us,” he said. “The advantage of making this investment is that we attract a lot of business from the community and our customers know that this is a new way of refreshing their financial needs and creating a different vibe absolutely.”

Although he wouldn’t discuss specifics and there are no tape-cuttings scheduled on the horizon, Deloney said it may not be Citibank’s last such investment in California.

“We are looking at some places,” he said, “but nothing is going on right now.”

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