Why BofA is Deploying Financial Centers to Meet Customer Needs
By David Evans, Chief Content Officer at The Financial Brand
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In a recent episode of the Banking Transformed podcast, host Jim Marous spoke with Will Smayda, who oversees Bank of America’s 3,650 “financial centers”, about the bank’s counterintuitive $750 million expansion plan.
After reducing its traditional branch network from 6,000 to 3,700 locations, Bank of America is now pivoting, opening 150 new financial centers by 2027, each costing more than $5 million.
The financial centers reflect a fundamental shift in branch purpose: from transaction processing to advisory services. These centers serve as relationship hubs where 12,000 specially trained relationship bankers provide financial guidance.
The pay-off: The bank has doubled its deposit base while reducing branches by almost half, demonstrating customers increasingly value digital capabilities and advisory relationships over transaction-focused branch access. Meanwhile, says Smayda, the new financial centers drive a 50% increase in digital engagement while delivering over $100 million in out-of-home marketing value.
Redefining Branch Economics Through Integration
Traditionally at BofA, each bank branch was evaluated on its own. Smayda explains this no longer reflects reality: “Historically, you would think about each branch as an individual franchise with individual customers. Truth is, customers don’t bank with us that way.” Modern customers interact across multiple channels and locations while conducting most transactions digitally.
A new system: The bank now evaluates branch economics at the community level, examining how four-center clusters perform while serving tens of thousands of customers collectively. This “hub-and-spoke” model designates high-traffic locations as “hubs” for heavy transactions and extended hours. “Spoke” locations emphasize appointment-based advisory services, with 40% of employees working flexibly across locations.
This integrated approach changes expansion economics. When entering markets like Denver, “there were over 200,000 consumer clients already in Denver before we ever opened a branch 10 years ago,” Smayda notes. These customers held accounts through digital channels, Merrill Lynch, or commercial banking. Adding physical branches serves existing bases without requiring greenfield acquisition.
Need to Know:
- Appointment-based banking has transformed financial center economics, with 10 million scheduled meetings in 2024, while enabling better preparation, personalized service, and efficient staffing models.
- The hub-and-spoke staffing model allows 40% of employees to work flexibly across four-center neighborhoods, each serving 20,000-30,000 customers rather than operating in individual franchise locations.
- A relationship banker model meanwhile reimagines entry-level positions, with $25 per hour minimum wage and comprehensive training spanning transactions, account opening, and digital platform expertise, creating career progression paths that AI cannot imitate.
Redefining Branch Economics Through Integration
The relationship banker role represents Bank of America’s answer to meeting the advisory needs of its customers, while simultaneously creating new, sustainable banking careers as AI and related technologies absorb transactional tasks.
“Instead of coming in as a traditional teller of 20 years ago, where you are trained with your cash box and your set of transactions,” says Smayda, “you are now trained as what we call a relationship banker.”
These employees receive comprehensive training spanning cash handling, digital platform expertise, and account opening capabilities. The expanded scope eliminates inefficient handoffs. Smayda illustrates the evolution: “If the client decides that this is the right time to open a family banking account for their 12-year-old, the relationship banker of today will sit down in an office and open the account.”
Bank of America raised its minimum wage to $25 per hour nationwide, establishing “a livable wage in most of the country,” enabling recruitment from diverse talent pools. The career progression architecture offers clear advancement pathways to senior banker, business banker, or financial advisor roles. “That job will still exist in 10 years,” Smayda asserts.
Key Takeaways for Bankers
Bank of America’s strategy offers critical lessons, though Smayda acknowledges that his bank’s scale creates advantages. Building technology “for a client base like ours, you can build bigger, you can build safer, and the economics work.”
Regional banks face some challenges building for thousands rather than millions of customers. However, four fundamental principles translate across institution sizes.
First, branch decisions must reflect actual customer behavior. Bank of America’s expansion followed data showing advisory demand persisted while transactional traffic declined.
Second, profitability models should evaluate community ecosystems. Smayda emphasizes looking at entire markets: “Do we need 100 or 117 financial centers to serve the community?” This holistic thinking accounts for channel synergies individual branch P&Ls obscure.
Third, workforce development determines competitive advantage through meaningful careers with clear progression.
Fourth, timing is critical. “You can’t go too fast because then you turn your clients off,” Smayda warns. “But if you go too slow, someone else will start talking to your customers.” Banks must pace transformation to match customer readiness.
Finally, trust builds generational advantage. “Building brand loyalty and trust is a many decade, and one might even argue, generational endeavor,” Smayda concludes. “You can’t replicate that, not digitally or with bricks and mortar. That, you build over time.”
