The expansion of banks and other businesses is often not a reason for a prominent profile in the news. Businesses change their hiring practices and break ground on new buildings on a daily basis. The process has become so routine that it is rarely mentioned at all by people outside of a company. However, a recent announcement of an expansion by regional banking chain Fifth Third bucks that trend. In terms of size and greater effects on the economy as a whole, Fifth Third’s expansion serves as a testament to the ongoing strength and viability of the American midsize bank.
A regional bank grows
Fifth Third has decided to expand its reach throughout the South. It will open up seven new financial centers to provide better services for its thousands of customers. Five of these financial centers will be in Florida. They will help to bolster the bank’s already-significant presence in the Sunshine State. Fifth Third will also open up financial centers in Chicago and Detroit. These new locations will help the bank expand to major financial centers where they can more easily attract top-flight urban talent. Management at Fifth Third acknowledges that this is an interesting development that may seem to buck numerous trends.
The banking world has been moving slowly but surely towards digital transactions and online accounts in recent years. Online banks have begun to offer competition that traditional banks like Fifth Third have had to adapt to. Such a shift often leads to downsizing of traditional physical branches that are more expensive to maintain. However, management still believes that physical centers are a significant part of their business strategy moving forward. These locations have trained financial professionals who can provide the expertise necessary to help individuals with their biggest purchases.
The results of expansion
The expansion by this prominent regional bank points to a number of trends in the banking world. First, it solidifies Fifth Third as a prominent regional player. Local banks have been considerably harmed in the fallout from the Great Recession. Dozens of local bank branches and chains have been swallowed up by their larger regional competitors. The banking sector has gone through unprecedented consolidation particularly in the South. Some regional banks such as Wachovia have been engulfed by even larger financial institutions that help drive the national economy.
Building new financial centers will help Fifth Third immunize itself from these greater trends. First, Fifth Third will be expanding its visibility. Large financial centers are often prominent points on the business landscape that businesses and individuals in search of loans can recognize. The bank may be able to use its prominence on urban landscapes to argue that it will be more trustworthy and secure than many of its rivals.
Furthermore, the construction of a financial center has dividends beyond the basic ins and outs of the banking world. Financial centers serve the same marketing and advertising purposes as naming a stadium after a bank or other business. They can serve as prominent meetingplaces and places for commerce. The many tenets who are also in the financial center can provide a diverse series of goods and services.
Fifth Third in Raleigh
A prominent example of this approach is one of the Fifth Third centers that is located in Raleigh, North Carolina. This expansive building, also known as the Atrium, houses Fifth Third retail and commercial services. It contains a number of financial services professionals who can help individuals negotiate home equity lines of credit or figure out the account type that will work best for them. The building also stands out over surrounding buildings. It has a Mediterranean restaurant in the basement that brings in employees from the surrounding area. They can enjoy lamb gyros while also coming in close contact with the professionals at Fifth Third.
Conclusion
It remains to be seen whether or not Fifth Third will expand beyond its regional bounds. The pressure to consolidate will only grow and it is conceivable that Fifth Third could replace Wells Fargo or Bank of America as a national powerhouse in the next two decades. However, no matter the long-term future, these seven new financial centers will be critical in the short-term. They will help Fifth Third gain the notoriety and public visibility of any other prominent, leading company in their field.