A Renewed Focus on Financial Services at Physical Locations

Patricia Mongold, president and CEO of Mt. McKinley Bank, also recognizes the unique opportunity a physical location affords. Customers can receive personalized service at the bank’s five locations—three in Fairbanks, one in Delta Junction, and one in North Pole. “We like people to come into the bank and get to know us,” she says. “We can tailor our products and services better if we have an opportunity for face-to-face interaction.”

Branches will always be a source of strength for KeyBank, says Derek Pender, regional retail leader for Alaska and Washington. Over the last few years, KeyBank has experienced a shift in the way its clients visit and utilize branches, but investments in Alaska allow the institution to deliver the best possible experience. “Our investments in the digital experience—and in our teammates, so they can advise with excellence—are important to us and our clients,” Pender says. “We value relationships with our clients and work hard to help them achieve their financial goals and dreams.”

Branches are also integral to customer relationships at Wells Fargo, in combination with its online and mobile channels and automated teller machines (ATMs), according to David Larkin, region branch network executive Alaska and western Washington. “Our branches are a place where customers can meet with a banker for advice and guidance and have a meaningful financial health conversation to help them reach their goals,” Larkin explains. “Today’s branch visit is about deepening our customer relationship, where customers engage in financial checkups with bankers to create and fine tune long-term financial goals.”

Reimagining and Remodeling Facilities

Although some banks have closed locations, others have added and/or remodeled branches. For instance, Northrim Bank is augmenting its locations in Alaska—where the number of branches overall is declining. As of June 30, 2019, the number of FDIC offices in Alaska was 121, and this number was 113 for June 30, 2023, according to Zins. “Three of the seven banks in Alaska have remained flat,” she says. “Three other banks have reduced their offices, and Northrim has added locations.”

Since 2019, Northrim Bank has added its Fairbanks West full-service branch. It also added full-service branches in Kodiak and Nome. “In Nome, we were able to quickly open a branch earlier than planned after Typhoon Merbok hit, as we saw a huge need in the community for more access to banking services,” Zins says. “We recently opened a Loan Production Office in Homer, and we have just started construction on a full-service branch that will open in 2024.”

Northrim has also remodeled several branches in Anchorage. “Years ago branches were built to focus on the vault and the teller lines,” Zins explains. “Our branches are built now to focus on the community and enhancing the relationships with our customers.”

With its service-oriented culture, FNBA—which has physical locations in nineteen communities in Alaska—constantly analyzes branch and transaction patterns and adapts to meet customer needs and industry trends. Case in point: in 2020, FNBA moved its 18,000-square-foot Anchorage Main Branch location from Fourth Avenue, built for long lines of check-cashing customers, to a smaller footprint on K Street. “Our newer Metro Branch is approximately 2,500 square feet,” Kroll says. “Customers and employees alike are very happy with the success of our modern and smaller location.”

That same year, FNBA closed its Parkway Branch in East Anchorage, another facility where the large footprint was underutilized. The bank was able to reallocate resources to nearby U-Med and Muldoon Road locations. “For us, it’s not the size of the façade that matters most,” Kroll says. “Our priority is to support our team’s ability to meet our customers’ needs—whether in person, over the phone, or through online and mobile channels.”

In 2021, FNBA opened a Loan Production Office in Ketchikan to better serve Alaskans in the southern Panhandle, which some national banks have vacated, according to Branch Administration Director Karl Heinz. FNBA also relocated its Healy branch to a new location with added features, including a double-lane drive-thru, a drive-up ATM, a drive-up night drop, and easy access to the Parks Highway. Heinz says, “Our understanding of Alaska and access to in-person banking, as well as a suite of secure and digital services, make us well prepared to serve the entire state of Alaska.”

The bank launched a Branch Re-Engineering initiative a few years ago to rethink branches in terms of physical space, staffing models, customer engagement, enhanced technology, and system functionality. Kroll says, “In each instance, we redesigned the branch layout to portray a more modern and open concept, multi-functioning workstations to support a universal banker model, and fewer teller windows.”

Besides completing branch remodels, FNBA also repositioned customer service teams, including moving Escrow Services to the Eastchester Branch. The bank also made some less evident investments to re-engineer branches, such as altering its drive-thru mechanics. “These changes not only improve our efficiencies but also significantly enhance the customer and employee experience,” Kroll says.

With thirty-seven locations in Alaska, Wells Fargo is endeavoring to “rightsize” its network. Since January 2021, the bank closed four branches. “We may continue to combine two older existing branches into one better situated location, as was done in September 2023 when our Wasilla branch was consolidated into our Cottonwood Creek branch approximately 2.2 miles away,” Larkin says.

Branch consolidations do not diminish the importance of Wells Fargo’s presence, Larkin says. “We are committed to serving all communities, including rural markets, and we know our customers value our presence in small, remote towns,” he adds. “Wells Fargo is proud to have the number one market share in Alaska with 41.86 percent ($6.48 billion), according to FDIC market data for deposits as of June 30, 2023.”

Denali State Bank has also enhanced some of its locations. A few years ago, the bank’s Chena Pump office received a minor facelift. Now the manager is situated in the lobby, which supports better customer interactions.

A similar strategy went into an extensive renovation of the bank’s Fairbanks headquarters. Prior to the remodel, the manager, customer-facing employees, and most of the main office floor were behind the teller counter. “So we reduced the size of that backroom working area and moved the manager out into the lobby,” Lundgren says. “All of our customer service, new accounts, and customer-facing people now all have workstations directly accessible to our customers.”

Denali State Bank also relocated its entire executive team downstairs to offices with glass walls adjoining the lobby. Customers—many of whom are friends—can greet the management team when they stop by the main office. “That’s one way we as a small bank can differentiate ourselves from our larger competitors,” Lundgren explains. “I think it’s improved our reputation as a customer-focused bank.”

In 2020, Mt. McKinley Bank revamped its main office to expand electronic services. Before then, retail customers typically had to deal with a teller, and businesses would work through the information technology department. “Our thinking was to bring all of the services under one place,” Mongold says. “It’s been a really positive thing from a customer service standpoint.”

Mongold says Mt. McKinley Bank is considering further expanding the department to include a call center.

Several KeyBank branches have also undergone full transformations, including collaboration with other lines of business to deliver an all-around engaging banking experience, Pender says. “This also is an example of KeyBank’s commitment to our presence in Alaska and the critical retail, small business, and commercial clients we serve,” he says.

Reinvesting in Branch Networks

KeyBank is still seeing a steady increase in client preference for digital banking, though. “Client transactions through online and mobile banking were already two times the number of customer transactions completed at a branch office,” Pender says.

Northrim Bank is also focused on enhancing its digital platforms. And Wells Fargo, while updating branch location floorplans to create more space for conversation and consultation, is also continuing to invest in its technology. In October, the bank announced the expanded availability of LifeSync, a personalized digital approach to aligning customers’ goals with their money. In September, the bank announced the enhancement of its Fargo virtual assistant.

Over the next year, Mt. McKinley Bank will enhance its digital capabilities for customers. The bank is hoping to roll out online account onboarding. The bank is also considering deploying interactive teller machines, especially for North Pole and Delta Junction. “We are always looking for good opportunities to provide better customer service,” Mongold says.

However, Heinz says nothing can replace the value of in-person service when a customer needs it most. FNBA is committed to providing customers with choices—when, where, and how they need it—at home, in the office, on their phone, or digitally. “Any change or enhancement we make at our branches is always made with the customer in mind,” he says.

There will always be a place for branch facilities, Mongold says. She explains, “I think they offer a real value to our customers, and I don’t ever see them going away.”