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When Jamie Dimon was backstage at a conference and heard a competitor crowing about taking on old JPMorgan branch leases and stealing the customers, he vowed it would never happen again.<\/p>\n
That\u2019s why the CEO of America\u2019s biggest bank, at one point, decided to personally rubber stamp or veto every branch closure to ensure the institution didn\u2019t lose any more customers<\/a> to rivals.<\/p>\n During a conversation at AllianceBernstein\u2019s Strategic Decisions conference this week, Dimon said<\/a> at a previous Bernstein conference Vernon Hill, who founded Commerce Bank in the 1970s, crowed about taking on the branch leases JPMorgan had vacated.<\/p>\n \u201cI was in the back listening to Vernon Hill<\/a> up here, and he was doing a slide presentation for you all,\u201d Dimon\u2014who has led JPMorgan since 2006, recounted. \u201cHe was making fun of Chase. [Hill] said: \u2018They closed this branch, I moved in. They closed that branch, I moved right in. <\/p>\n \u201cWhen he was walking down I said: \u2018Vernon, that will never, ever happen again.’\u201d <\/p>\n But the light-hearted exchange did prompt a change at America\u2019s biggest bank.<\/a> <\/p>\n \u201cI put in place a rule at the time that you couldn\u2019t close a branch without my permission,\u201d Dimon\u2014who was paid $36 million<\/a> for his work in 2023\u2014said. <\/p>\n \u201c[Hill] took 100% of consumer business [in those branches]. 100%. Even if there was a Chase branch a block away [people said]: \u2018Oh they\u2019ll just go to the other branch.\u2019 No they didn\u2019t. They wanted that branch.\u201d<\/p>\n Dimon, who recently shocked Wall Street by revealing that he would be stepping down from the CEO role in the next five years<\/a>, admitted that Commerce Bank \u201cof course\u201d did other things that ensured good service to keep former Chase customers from returning.<\/p>\n The Wall Street veteran didn\u2019t give the specific year the exchange took place, but given that Dimon took on the CEO seat in 2006 and Hill was ousted in 2007<\/a>, it narrows the timeframe.<\/p>\n Across the U.S., banks are largely shutting more locations than they are opening them. <\/p>\n Research from S&P Global found that in 2023, a net 1,409 bank branches closed. This was a slowdown in the closure pace recorded in years prior: 1,854 in 2022 and a record-breaking 2,928 in 2021.<\/p>\n JPMorgan Chase<\/a>, on the other hand, announced in February<\/a> it was making a multi-billion dollar investment into its branches, opening 500 branches and hiring an additional 3,700 employees by 2027. <\/p>\n A further 1,700 Chase branches will be renovated, focusing on entering new markets in low-to-moderate income and rural communities.<\/p>\n Dimon pushed back on the theory that JPMorgan Chase is \u201cdoubling down\u201d on bank branches<\/a>, saying the company is also \u201cconsolidating some.\u201d He admitted that even this, he was skeptical about.<\/p>\n \u201cWhen I got to Bank One they were consolidating\u2014you know \u2018clicks not bricks,’\u201d Dimon\u2014who was chairman and CEO of the institution between 2000 and 2004 when it merged with JPMorgan\u2014said. <\/p>\n \u201cThey were closing branches that were making $1 million a year profit. They would have made $1 million in profit a year for the last 20 years\u2014what in the hell were they thinking?\u201d<\/p>\n The Harvard alumni also had some advice on branches moving forward\u2014perhaps a tip for his successor: \u201cBe very analytical about what you close, why you close it, why you can keep it. I could give you some very specific examples of times I stopped closing a branch and they act like I\u2019m interfering. I\u2019m like \u2018I\u2019m not interfering\u2014don\u2019t close that branch.\u2019 I\u2019m not going to give you all those examples, I don\u2019t want to tell my competition why.<\/p>\n \u201cAlso I said: \u2018If you close that branch, you know who\u2019s going to open there? Wintrust. CapOne\u2014like, tomorrow. [They\u2019ll] take the lease and move in.\u201d <\/p>\n In addition to ensuring consumers don\u2019t jump ship to another lender, JPMorgan is also answering some of the requests consumers have in the age of online banking.<\/p>\n While the American Bankers Association<\/a> found in 2023 that 71% of 2,211 adults surveyed prefer to bank via an app or computer, a significant proportion wish their digital banks had more of a human element. <\/p>\n Nearly four in ten consumers, per user experience experts UserTesting<\/a>, wish their online bank had a human on hand to deal with customer complaints.<\/p>\n Likewise, while many consumers enjoy the convenience of online banking, certain customers prefer speaking to a teller. <\/p>\n In 2021, the FDIC reported that in-person banking is more prevalent among \u201clower-income households, less-educated households, older households, and households that did not live in a metropolitan area\u201d\u2014aligning with the focuses laid out by Dimon\u2019s team.<\/p>\n<\/div>\nAgainst the grain<\/h2>\n
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