Wells Fargo Bets Big On Minibanks

Its scads of tiny outlets should cut costs--and win customers

Beginning in 1995, Wells Fargo & Co. embarked on an unusual experiment. It closed 22 traditional branches in the Sacramento area while opening dozens of less costly minibanks in such places as supermarkets. The San Francisco-based bank wanted to study whether its customers would migrate to these new outlets or dump Wells Fargo altogether. The result: By March, the bank says, it increased the total number of banking facilities in Sacramento by 33, slashed annual operating costs there by an estimated 20%, and managed to retain and even expand its customer base.

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