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JPMorgan Chase Defends Branch Expansion, Cites Synergy and Deposit Growth

The executives emphasized the importance of branches, stating that digital channels and branches work together and strengthen each other


branch strategy, branch expansion, digital banking, customer engagement, deposit gathering, branch closure, acquisition, community center branches

According to an article on The Financial Brand, JPMorgan Chase defended its contrarian branch strategy during its Annual investor day. The bank has been focused on expanding its branch network, despite the overall trend in the banking industry towards digital banking. While many banks have been reducing their branch presence, Chase opened 650 new branches in the last five years and plans a small increase in its branch footprint.


Jennifer Piepszak, co-chief executive of consumer and community banking at Chase, explained that while they have closed 500 branches since 2017, the bank has expanded into 25 states where it previously had no presence. The executives emphasized the importance of branches, stating that digital channels and branches work together and strengthen each other. Chase branches have outperformed those of other large banks in terms of deposit gathering, and the longer a branch operates, the more deposits it attracts.


Chase's approach is not an either/or proposition between digital and branches. The bank believes in engaging customers in their channel of choice and most of its banking customers use both digital and branches. The combination of digital and physical channels has allowed Chase to reach more customers and serve 30% more customers compared to 2019.


Regarding Chase's recent acquisition of First Republic Bank, the bank will evaluate the acquired branches individually. Some branches will be closed due to proximity to other First Republic or Chase branches, while others with strong locations will be converted to Chase branches or specialized Chase Private Client centers. The acquired bank's branches will retain the First Republic branding until backend conversions are completed.


Chase has also been opening "community center" branches in underserved neighborhoods, which feature specialized staff to cater to the needs of the local community.


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