News of the retail bank’s death may have been greatly exaggerated.

True, more than 10,000 U.S. bank branches have been shuttered since the financial crisis in 2009. And big banks are continually paring down their branch-banking footprint – in January, Wells Fargo & Co., Colorado’s biggest bank, said it would close 800 branches by 2020.

That suggests that customers are increasingly content to do most of their banking online, by phone or via ATM. But when it comes to financial advice, clients don’t want automation, says Michael Walters, senior vice president and regional retail leader for KeyBank’s Colorado market.

“They want to talk to people. They want to be guided,” he said. And what that means for Walters is dreaming up a new retail banking model.

Walters was brought in four months ago to oversee KeyBank’s 60 retail branches in Colorado. Previously, the head of KeyBank’s Colorado branches covered a three-state region and was based in Salt Lake City.

But Walters has made a study of retail banking. A few years ago, while at Pittsburgh-based PNC Bank, he was tasked by bank leaders to answer the question: Why do banks want retail branches?

“I spent the last three years really trying to figure out what should the operating model be. Why would clients come into this old fashioned, stuffy, brick-and-mortar bank?”


Michael Walters is senior vice president and regional retail leader for the Colorado market.

KeyBank — the banking brand of Cleveland, Ohio-based KeyCorp (NYSE: KEY) — has about 1,200 retail banks across 16 states. Colorado is its fastest-growing market, Walters said.

Over the past few years it has become apparent that retail banks are no longer the center of the financial universe, Walters said. People are going into banks less and less.

But, he said, when customers do go into a bank, they stay longer and need in-depth financial advice.

“When it comes to financial management — buying your first home, setting up your kid’s 529 plan to help them go to college — our clients still want to see us," he said.

"That is an important distinction. You have to change your operating model as a bank to serve them that bigger need.”

Think about it, he said. Walmart Inc. – the nation’s biggest retailer – bought an e-commerce men’s clothing store Bonobos Inc. E-commerce giant Inc. is opening brick-and-mortar stores and bought Whole Foods Market.

“E-commerce giants like Amazon are trying to get more physical. And physical giants like Walmart art trying to get more digital. The reason it’s happening, is because clients want both."

"Banking — we have to evolve the same way,” he said.

When he looks into the future, he sees a retail banking model where all transactions are automated. For example, a restaurant owner who needs a change order could make the transaction on a mobile app, then go to an ATM and the change order would come out.

But if that same restaurant owner needs to talk about a loan or financial planning, then, they see an advisor in the bank branch.

“What we continue to believe – and what Key believes – is that the need [for] advisory [services] is increasing dramatically and the need for transaction [services] is dramatically decreasing [at retail branches]."

So, for now, Walters is not ready to write the obituary of the retail bank. He is ready to imagine a retail bank with no bank tellers and no money – just financial advisors meeting one-on-one with clients.

"The broader theme is, brick-and-mortar retail branches are here to stay," he said. "But they are going to serve a different purpose."

2017 Largest Banks by Deposits

Ranked by Inside Deposits

Rank Business name Inside Deposits 1 Wells Fargo Bank NA $24.3 billion 2 FirstBank $12 billion 3 U.S. Bank NA $11.9 billion View This List

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