Aggressive national and local banks are gearing up for an all-out war for the hearts and minds of Washington's consumers.
The prize: your checking account.
Hundreds of new branches are to open here, and most will throw bankers' hours out the teller window. Bankers are busily courting former Gap and Old Navy managers to transform their branches into user-friendly retail outlets. Free or cut-rate deposit services are expected to become the norm, and customers who demand lower fees from their banks can expect to be obliged. Commerce Bank, a fast-growing New Jersey operation with an emotionally driven team approach to making depositors happy, opens its first branch here next month and promises 200 in the region by 2010.
"With Commerce entering, Washington is about to become the first national battlefield," said Dean Silverman, a McLean resident and director of financial retailing consultancy John Ryan International. "It will be like an invasion, and the established players will do whatever they can to defend their turf."
During much of the 1990s, banks often seemed intent on thinking up new ways to infuriate customers. They cut back on tellers and hours, creating long lines during peak hours to encourage more customers to use lower-cost automated teller machines or online banking.
Annoying nickel-and-dime fees for basic transactions became common at large multistate banks, including First Chicago Bank, which in 1995 attracted national attention for slapping a $3 fee on customers who asked tellers for help.
Now, goaded by savvy new competitors such as PNC Bank, Commerce and First Horizon, a Tennessee bank that modeled its Washington strategy on Commerce's, traditional branch banks are trying to get customers back into their branches.
Mainstream banks are using convenience and personalized service to persuade consumers to pour cash into accounts, so the cash can be redeployed in loans and other investments that make money. And a free checking account is just the start: Branch employees are being drilled in how to tempt customers to take other, more profitable products.
"Banks are terribly bureaucratic," said Arlington resident Don Parker, 67, a consultant who became a customer of First Horizon's Glebe Road branch several months ago because it offered a different style of banking.
Parker had been a customer of several local and national banks since moving to the area in 1964, and had gone through numerous mergers in which banks changed the signs over their doors every few years. He found that when he needed help with deposit or loan products, as he did in establishing a line of credit last year, he was pushed to talk to someone in North Carolina rather than in his branch. At First Horizon, he said, branch managers were able to help him with anything he needed -- be it his condo-association account, his credit line or other matters -- and even suggested ways for him to save money.
"It seems like it's managed locally," he said of First Horizon. It also helps that the bank is open until 8 p.m. Monday through Saturday. "I work. The only time I can come into the bank is in the evenings or on weekends."
Such individual service, offering highly customized products for each customer and doing it when its convenient, is a far cry from the past 20 years, when most large consumer banks built up their bottom lines by acquiring more banks, cutting costs and jacking up fees.
