Bank of America opens new-format branches; design promotes more use of non-teller services.

CENTURY CITY - Supermarket bank branches have sprung up like weeds in L.A. over the last two years, but now San Francisco-based Bank of America has shifted gears by bringing the grocery store concept directly into the bank. This latest wrinkle in retail banking is part of an ongoing trend, which could some day relegate traditional hank branches to the realms of banking history.

A study last September by accounting firm Deloitte & Touche LLP predicted: "Half of traditional retail bank branches in the U.S. ... will disappear over the next five to 10 years." The study also predicts that "only 25 percent of transactions in the U.S. will be handled by branches in the year 2000, vs. 40 percent in 1993."

In an effort to stay ahead of the curve, BofA began experimenting last year with a new format for its regional commercial banking offices, or RCBOs. Unlike most of its retail branches, BofA's RCBOs are located in heavily commercial areas and cater mostly to businesses, their executives and employees. BofA's four RCBOs in Los Angeles County are in Century City, downtown Long Beach, downtown L.A. and in Woodland Hills at Warner Center.

Eggs in back

BofA's first L.A. County RCBO to take on the new format was its Century City branch, which reopened with the new look nearly four months ago. Located at the corner of Olympic Boulevard and Century Park East, the branch emulates a typical supermarket format, according to Steve Ritter, commercial banking retail division manager for BofA.

Put simply, the new layout places the bank's most popular area - the teller line at the back of the branch, much the way milk and eggs, two of a supermarket's most popular items, are usually placed at the back of a store.

"Our teller line would be the highest-volume area (of the bank), so you want the customers to come through the store" and pass by all the other products and services on their way to the teller window, explained Ritter.

In the course of getting to the teller, customers of the Century City BofA must pass by a number of stations or kiosks, each designed to peddle the bank's non-teller services. The four non-teller areas in the new BofA layout include a self-service banking center, an investment center, a personal banking center and a business center.

Located directly inside the front entrance, the self-service banking center consists of several automated teller machines and direct telephones to off-site customer service representatives.

After passing the self-service banking center, customers walk by the investment center, which is manned by a specialist peddling investment vehicles such as mutual funds, stocks, bonds and treasury bills. Next is the personal banking center, where customers can open new accounts and apply for consumer loans and credit.

"Then comes our teller line, which is a reduced version" of the traditional line, said Ritter, explaining that the current teller line has only 10 windows compared with 16 to 18 windows before the redesign.

For logistical reasons, the business center in BofA's Century City branch is located beyond the teller line, to put it close to the branch's vault area. This final area is manned by a small-business specialist whose job is to develop and maintain relationships with the branch's small-business customers.

Good results

The Century City office is BofA's third branch with the new format. The first such branch opened in January 1995 in San Diego, and the second opened a year ago in Oakland. Ritter said BofA's RCBO in downtown L.A. is also scheduled for conversion to the new format in the near future.

The jury is still out on the Century City branch, but the converted branches in San Diego and Oakland have already produced some impressive results, according to Ritter.

Specifically, he reported that in those two branches: the number of deposits and savings withdrawals at teller windows are down 15 percent; the dollar volume of small-business loans is up 45 percent; and ATM deposits and withdrawals are up 50 percent and 40 percent, respectively.

In fact, the only area that hasn't benefited from the new layout is consumer loans, which have not increased significantly at any of the redesigned branches, according to Ritter.

Outside BofA, few if any banks or thrifts with branches in L.A. have made major changes to their branch designs yet. A number have opened banking centers in supermarkets, including Wells Fargo Bank of San Francisco, Chatsworth-based Great Western Bank and Union Bank of San Francisco. Irwindale-based Home Savings of America, the nation's biggest thrift, is currently studying ways to take advantage of the underutilized space in some of its larger "image" branches, according to thrift spokesman Adrian Rodriguez.

Meanwhile, there are currently no plans to change the branch layout at City National Bank of Beverly Hills, according to its president and chief operating officer, George Benter.

"We're not competing head-to-head with BofA and Wells Fargo for retail banking," said Benter, who described BofA's new design as "an attempt to reduce personnel expense and create a more transaction-oriented environment."

"I've seen (the new BofA branch) and walked through it. I'd describe it as impersonal, though it's probably cost-efficient if you get a huge number of transactions. But you don't see people," he said. "You see telephones and machines."