2008 Archives

Why are there so many bank branches?

Excerpt

The following is from the Oct. 9, 2008, edition of WFAA News. Scott MacDonald, an adjunct professor of finance at SMU's Cox School of Business and chief executive of the Southwestern Graduate School of Banking at SMU, provided expertise for this story.

October 9, 2008

By DAVID SCHECHTER
WFAA-TV

It is a riddle, wrapped in a mystery, inside an enigma.

Winston Churchill said that about Russia - we're talking about the banking industry.

It's in turmoil.

Yet new bank branches are popping up on street corners across North Texas.

So why are banks are on a building binge?

Bank branches are the new Starbucks.

There's probably one going in near you, right?

This can't be cheap.

"[It's] extraordinarily expensive," said Scott MacDonald from the SMU's Southwest Graduate School of Banking.

And to the average person, it doesn't particularly make sense.

I mean, if you're like me, you bank online.

Honestly when was the last time you even went inside a bank?

So, why build more?

"If you want to be a large company and you want to be in some of the best markets in the world, obviously Texas would be one of those," said MacDonald.

MacDonald says the big banks want to do business here.

But, until recently, many were "unknowns."

Branches are like billboards, saying "we're open for business." In a big way.

"If you need to make a presence where would you make it. In the back corner behind a strip mall or on a very busy corner, so people can see you?" said MacDonald.

And while many customers do bank online, most customers set up accounts in person - accounts that generate fees.

See the television interview and the full story.

 

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