JPMorgan Chase
Pam Codispoti, who oversees JPMorgan Chase's retail branch network.
- While many banks are shuttering branches, JPMorgan is expanding.
- They've tapped Pam Codispoti, creator of the Chase Sapphire Reserve, to manage their network of bank branches.
- Business Insider recently spoke with Codispoti about her plans for JPMorgan's network of brick-and-mortar banks.
- She discussed dispelling millennial myths, a new type of bank branch Chase is launching this month, what she learned from the Chase Sapphire Reserve experience, and the do-or-die decision that went all the way to the top.
Across the country, banks are closing retail branches at a record pace. Most of them, that is.
JPMorgan, on the other hand, recently announced it would be expanding its network. It'll add 400 new branches in 15 to 20 new markets over the next five years - an investment spurred in part by the savings from the recently passed tax law.
JPMorgan has, of course, culled some branches over the years, but far fewer than its peers - just 484, or 8.6%, since 2012, compared with more than 30% cut by competitors Citigroup and Capital One over the same period.
The firm expects the investment in branches to help its bottom line - a belief seemingly divergent from conventional wisdom in the banking industry, which is largely preoccupied with handling the customer migration to digital and mobile platforms, especially by millennials.
The job of captaining the investment belongs to Pam Codispoti, the JPMorgan exec who cracked the code on millennials with the creation of the Chase Sapphire Reserve.
Codispoti, who spent nearly 12 years in credit cards at American Express before joining JPMorgan in 2014, was promoted to oversee JPMorgan's retail bank branch network back in October, departing from her post as the president of Chase Branded Cards.
She knows that there are many skeptics and naysayers about the future of retail branches, but she's game to prove them wrong: "There is a myth out there that branch banking is dead, that branches are going away. I just don't believe that to be true," she said.
Business Insider recently spoke with Codispoti about her plans for JPMorgan's network of brick-and-mortar banks. We talked about dispelling millennial myths, a new type of bank branch Chase is launching this month, what she learned from the Chase Sapphire Reserve experience, and the do-or-die decision that went all the way to the top.
The following has been edited for length and clarity.
Business Insider: JPMorgan just announced it is expanding its branch network. How did you decide to do this, and what's the strategy behind it?
Pam Codispoti: We've been in 23 states, and for quite some time we have had an aspiration to expand into other markets. The Chase consumer businesses have been in some of those other markets. I come from the card business, that's a national business - we're in lots of markets.
And so the branch is kind of the hub in many ways, the heart and soul of our consumer business. So to be able to now open branches in places like Washington, D.C., Boston, and Philadelphia I think is going to be a natural evolution, where there was some products, but now we'll be there with our flagship bank.
Our aspiration is to go much broader than that.
BI: What are customers clamoring for? What kind of feedback are customers giving you?
Codispoti: Customers expectations are at new heights, and so really they want a consistent experience, whether they're walking into a branch, walking down the street holding their mobile device, or working on their laptop at home in the evening. So that's the kind of feedback that we're getting. And so that's what we're focused on - building that omni-channel experience.
We get a lot of questions about the future of branches. We think branches are a critical key to success, a critical element of that omni-channel experience. You may not know this, but about two-thirds of our customers visit a branch four times a quarter, and with millennials it's three times a quarter. So when they want a certain type of experience, a certain level of advice, they're very eager and happy to walk into a branch to get that. But if they just want to pay a friend, split the tab for dinner on the restaurant they just came home from, they want to do that in the cab, on the way home, from their mobile device with Zelle.
BI: What is different about what millennials are looking for out of the branch experience compared with your older customers?
Codispoti: Based on what we've heard from millennials, they're looking for something a little bit different. There are some segments of customers that want to walk into the branch to do everything. To pay their credit card bills, to withdraw cash from a teller line - and they're very used to those routines.
Millennials really are about this omni-channel experience. They really would like to come to the branch for experiences and advice moreso than everyday transactions, which I think they feel very comfortable doing on their own from mobile or digital tools. So I do think it is a little bit different.
JPMorgan Chase
A mock-up design of an Everyday Express branch. The first six are set to launch February 12.
BI: What did you take away from experience running credit cards that you'll apply to the branch job?
Codispoti: One of the greatest learnings from that experience is: Design-led thinking, which starts with the customer, is always the way to go. We're operating in a much more agile environment, so whether it's Sapphire Reserve or Freedom Unlimited, we started with the customer, we designed a product, we got feedback, and we launched it into the market relatively quickly.
We took some calculated risks to do things differently than we'd ever done before. We launched Sapphire Reserve without any initial marketing. And we allowed our design target - which were savvy millennial travelers who rely on social - we kind of brought our product to them and allowed them to market our product.
Those principles of design-led thinking, customer first, getting into the homes of people, doing ethnographic research, and that agile methodology are things we will use as we try new things in our banking environment.
BI: How does what happened with the Chase Sapphire Reserve phenomenon translate to the rest of the Chase consumer business?
Codispoti: The fact that we were able to break some myths with millennials. When I first took the job there was kind of this general consensus in the market that millennials wouldn't pay a fee for a credit card or wouldn't be interested in premium products - it just isn't true. So I think we're kind of breaking those myths when we think about banking and home lending as well.
We've shared in the past that we've had some extremely successful initial tests with the Sapphire Reserve customer, offering them a home lending offer of 100,000 points if they completed a home-lending mortgage with us. And 50,000 points for those who upgraded to Chase Private Client and deposited $100,000 into an account. We saw extraordinary results, greater than we ever expected. So clearly this is an engaged customer base, they love the Reserve brand. It transcends card into other areas of their financial life.
So you'll continue to see us learning from that and building solutions designed for this cohort of customers.
BI: What is one example of a solution you're building for these customers? How is Chase innovating?
Codispoti: We're introducing something called Everyday Express locations, that are really going to leverage the technology in the branch like our eATMs. We'll have "Genius" kind of advice bars. We'll have our employees helping folks understand the mobile and digital tools available to them.
We have a long pipeline of innovations that are targeted to millennials, millennial-minded customers who really want to bank on their terms, wherever, whenever, and however they choose. And we want to live up to that expectation.
BI: When and were will people start seeing these new branch formats?
Codispoti: We're trying to test them in places where we think the consumers will really respond, so Culver City in California, here in the New York area in Queens.
We want to bring this to areas where we think there's a lot of appetite for more mobile and digital-first transactions and self service. We're going to roll it out in a limited number of pilot locations in the first half of the year, and pending the results we may want to tweak things before we roll out more aggressively, assuming it goes well.
Based on the feedback we've got - we've engaged customers all the way through the design and development of these branches, everything from what we call them to what they look like and how they operate - we feel pretty optimistic that we'll be rolling them out more aggressively the back half of the year.
(Editor's note: The first six Everyday Express branches launch the week of February 12)
BI: What has been your favorite on the job moment at JPMorgan Chase?
Codispoti: The Sapphire Reserve product was such a wonderful experience in so many ways. One of the moments that I think really stands out in my mind is when the product was launched and it became viral and the acquisitions far exceeded our expectations, we ran out of metal cards, we had to quickly pivot. There was a moment where we paused and said, "Should we slow this down, or should we continue?" And everybody came together, all the way up to the top of the company, and we said, "You know what? There's a customer need here. Clearly we've tapped into something. We want to continue, and we'll figure it out and we'll pivot." And we continued along with the product and the offer. And to me, that was just an example of how we were doing the right things for the customers, we're investing for the long run, and building a relationship with millennials and a brand that really spoke to them. And I think that was really a great moment.