BofA Ramps Up Expansion & Modernization of Financial Centers

Bank of America BAC is accelerating the plan, which was announced last year to open financial centers, with an aim to expand retail and small business banking services in new and existing markets. Also, the company announced additional efforts to modernize the existing network of branches and ATMs in response to changing customer behavior.

David Tyrie, head of Consumer Advanced Solutions and Digital Banking informed, “In order to be there when and where our clients need us, we’ve created a high-tech, high-touch experience across all channels, including our financial centers and state-of-the-art ATM network.”

Details

Under the plan, BofA already opened 150 financial centers over the last three years, with more than 350 expected to be opened by 2021 (including 90 that will be opened this year). Several of these financial centers will be opened in new markets.

Since 2016, BofA has entered and continued expanding presence in five states — Colorado, Minnesota, Indiana, Pennsylvania and Utah. The bank already opened more than 50 branches in these states, with almost equal number of financial centers expected to open over the next three years.

Additionally, BofA will expand the retail banking business in Ohio and Kentucky by opening more than 30 financial centers over the next two years. This overall expansion strategy will help the company to hire roughly 5,000 employees.

Along with this, BofA intends to modernize 1,500 financial centers by 2021, with new technology and layouts. It already modernized more than 1,000 financial centers over the last three years.

Further, the company announced plans to add 2,200 ATMs to its network over the next three years. By this year end, BofA will complete the multiyear initiative to upgrade the current network of more than 16,000 ATMs, with features that include latest technology to help clients perform several types of transactions.

Dean Athanasia, president of Consumer and Small Business at BofA mentioned, “Although more clients are using our digital banking capabilities, many still visit our centers for in-person conversations about some of their more complex financial needs. Our redesigned centers make it easy for them to access banking, lending, small business and investing professionals for tailored solutions and advice on their life priorities and financial goals.”

Road Ahead

BofA’s efforts to expand and modernize its network of financial centers and ATMs in new and existing markets will eventually cover almost 90% of the U.S. population. As part of its retail expansion strategy, it will help “clients in low- and moderate-income communities meet the unique challenges in managing day-to-day finances, improving credit and building financial wellness.”

Notably, apart from opening centers, Bank of America has been shuttering less-profitable branches. As of Dec 31, 2018, the bank had 4,341 branches, marking a decline of 3% from the 2017 level.

Moreover, BofA will likely face tough competition from several large banks, including JPMorgan JPM, Wells Fargo WFC and BB&T BBT in the states, where it plans to open financial centers and ATMs. Beside, JPMorgan already has a plan underway to expand the branch network across the country. (Read more: JPMorgan to Open 90 Branches in 2019, Hire New Staff)

After witnessing a dismal price performance in 2018, the stock has rallied 18% so far this year, outperforming the industry’s growth of 12.3%.