The future of the bank branch may soon get a boost by turning the lights out.
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J.P. Morgan Chase & Co. and General Electric Co. are announcing Wednesday that the industrial giant will help install new energy management and digital technologies for about 4,500 branches at the nation's largest bank.
The savings, according to a bank official, could add up to a couple of hundred million dollars over the next decade.
The changes are occurring as banks continue pressing to cut costs. Relatively low interest rates have pressured profits, while both trading and lending have hit weak spots in recent quarters.
New York-based J.P. Morgan will use GE unit Current's energy-management system of sensors, software and lighting controls to reduce electric and gas consumption by 15% and water consumption from irrigation systems by 20% in 4,500 of the bank's roughly 5,300 branches.
The bank is piloting the changes in 10 branches in the New York City area, with plans to roll it out nationwide in the second half of 2018, said David Owen, J.P. Morgan's chief administrative officer.
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While saving $20 million or so each year wouldn't put much of a dent in a company that projects expenses of $58 billion in 2017, it could help add momentum for branches at a time when they need to justify their costs as more customers turn to mobile banking apps. It is also designed as an environmentally friendly move that could appeal to some millennial customers and potential employees.
Specific changes in store for the J.P. Morgan Chase branches: automating lights; using occupancy sensors in facilities; and remotely controlling heating, cooling and irrigation systems.
That data will go into the bank's Network Operations Center, hosted in the cloud, and help the bank use less lighting and water when it isn't needed, Mr. Owen said.
It is also likely to reduce maintenance expenses, since the bank can check if a building is burning more electricity than it should or check potential installation problems, such as whether a door or window isn't sealing properly.
Customers are unlikely to notice many changes, though Mr. Owen said problems like the outage of an air-conditioning unit could be spotted ahead of time, before employees and customers are inconvenienced.
The move follows the bank's partnership last year with GE to install LED lighting in 5,000 of its branches. Around half the installations have been done so far and the rest are expected to be completed by year-end.
(END) Dow Jones Newswires
June 28, 2017 00:15 ET (04:15 GMT)