Page One

SAN FRANCISCO – As they lounge by a fireplace in cushy leather chairs, Charles Dorato and his daughter look like they could be relaxing in a cozy coffeehouse or a rustic ski lodge. Instead, they are sitting in the lobby of a Wells Fargo Bank branch, waiting their turn to tend to some financial business. 

“This is an interesting concept. I have never seen this in a bank before,” said Dorato, a New Yorker who was in San Francisco to visit his daughter. 

Unconventional bank branches are becoming less of an anomaly as the industry looks for ways to inject more warmth and zest into traditionally sterile offices. 

In Atlanta, Bank of America has introduced branches where employees dispense financial advice from behind “investment bars.” 

In Las Vegas, Nev., Washington Mutual Bank this year opened branches that feature children’s play areas, concierge desks and teller “towers” instead of the old-fashioned windows. 

The makeovers represent an about-face for big banks, which just a few years ago viewed their standalone branches as expensive relics of a bygone era. 

As more customers began to use automated teller machines, phone centers and the Internet to manage their finances, bankers began to close branches and devise fees that charged customers for frequent office visits. The few new branches that opened typically were scaled-down outlets squeezed into the corner of a grocery store. 

But bankers are now reversing course after realizing their traditional branch networks remain a vital link to customers, even as the use of automated channels continues to rise. 

While ATMs, phone centers and Internet remain great tools for holding down expenses, the automated channels aren’t as productive when it comes to increasing revenues. 

At San Francisco-based Wells Fargo, for instance, more than 80 percent of all its new sales are made inside its branches, known as stores, among the bank’s retail-driven management. 

The buying pattern is propelling a bank branch renaissance at Wells, which closed hundreds of its California offices from 1996-98 as previous management became increasingly convinced that investments in bricks-and-mortar were a waste of money. 

Under a new management team that took control in late 1998, Wells is now spending millions to renovate its branches with brighter colors and homey touches like the fireplace at one of its San Francisco branches. 

In the fourth quarter, Wells remodeled 45 California branches and plans to renovate at least 100 more in the upcoming year. 

“Traditionally, banks have always looked so imposing that people walking in sometimes think they better go back out and take off their shoes or something,” said Terri Dial, who runs Wells’ California branches. 

“What we are trying to do is create an environment where people will want to come in, sit down and rest their feet for awhile.” 

And while the visitors sit, Wells hopes to sell them even more financial products, from home equity lines of credits to mutual fund investments. In the last six months, the bank has increased its California branch sales staff — known as “personal bankers” in the Wells lexicon — by more than 10 percent. In 2001, Wells plans another 13 percent increase with the addition of 400 more personal bankers. 

Some Wells customers wish the bank would just hire more tellers to speed up the lines in the bank. 

“This new design looks nice, but I would probably exchange the coziness for about two more tellers right now,” said San Francisco resident Marla Clark as she waited in a line behind 13 other customers. 

Standing right behind Clark, Keiko Aoshima agreed: “I know a lot of people would appreciate it if the bank would spend more of its money on hiring friendlier and faster tellers than on making the branch look cozier.” 

Bank analyst Campbell Chaney of Sutro & Co. thinks Wells’ increased emphasis on its branches will pay off because the bank is adept at cross-selling its products. In a recent visit to a Wells branch in the San Francisco Bay area, Chaney found himself cornered by one of Wells’ personal bankers and wound up signing up for more services and products. 

“And I should know better,” Chaney said. “I give Wells a big edge over other rivals trying to do the same thing with its branches because Wells knows how to sell like a retailer. Others are just trying to learn.” 

Seattle-based Washington Mutual is so impressed with the results of its five new-age branches in Nevada that it plans to open 40 more similarly designed locations in the Phoenix, Ariz. area beginning next year. 

The new branch concept — dubbed “Occasio”, a Latin word for “favorable opportunity,” features roaming employees equipped with hand-held computers to help customers with simple transactions or questions.