Imagine participating in a live video conference with a financial consultant. Or learning the ins and outs of Internet banking with a trained expert by your side. Or gleaning the latest information on the stock market from a glance at a video board display.

At one bank.

Salem Five Cents Savings Bank is seeking to become the first bank in Boston to offer such services by creating a so-called “physical-virtual” branch in town.

“It truly is an oxymoron … [But] even the people who are venturesome in their desire to work in cyberspace also like to see a physical back-up of the place where they’re entrusting their money,” said William Mitchelson, chief executive officer of Salem Five and of

Mitchelson described a “very high-tech branch” featuring Internet kiosks, video conferencing capabilities, on-site staff to get customers surfing financially on the Internet, and a video board to show what’s going on in the stock market.

The new branch would also offer traditional teller bays and services for those less willing to plunge into the world of the virtual dollar.

“The current wisdom is that, although people are very much inclined to bank over the Internet, they also like to see a physical presence,” said Mitchelson.

Salem Five developed the plan for the new branch after observing the failure of larger banks to gain public favor for exclusively virtual branches.

While Mitchelson could have pinpointed a target Internet audience a few years ago, describing the Internet audience in 2000 is a much more difficult task.

“The profile of the Internet user has gone by the wayside. This Christmas, stores made $12 billion over the Internet; the Christmas before, they made $3 billion. So now it covers the wide spectrum,” Mitchelson said: those who are comfortable with technology and those who prefer the bricks-and-mortar approach.

Salem Five applied to the state Division of Banks last month to open the new branch. The comment period ended this past week. According to Steven Antonakes, senior deputy commissioner of the Massachusetts Division of Banks, the state could approve Salem Five’s application as soon as the end of this week.

“Assuming there are no issues, the application is likely to be approved by the end of February,” said Antonakes, adding that he was unaware of any comments.

“This is the first [physical-virtual branch] we’re aware of,” he added.

Salem Five, traditionally a North Shore institution, plans to establish the new branch, its first in Boston, at 52 Congress St. by the third quarter of this year.

“There are many of our customers who live [on the North Shore] who work in Boston. And many of our customers who are Internet customers live in the Boston area,” Mitchelson explained.

Now that a location has been chosen, the only challenges ahead lie in the physical and technological design of the new branch, said Mitchelson.

“We’re working on the design now, on what technology will be most well-received by customers. We have no model to work with here,” he said.

Salem Five, the highest ranking online bank in New England for the past five years, was one of the pioneers of online banking services in 1995. The institution has consistently been rated among the top banking Web sites in the country by Gomez Advisors, an independent rater of online financial services, and has acquired more than 10 percent of its total number of customers from the online community in the last five years, Mitchelson said.

The 144-year-old bank is looking to be a pioneer once again with this new branch.

“We have a history of being pioneers. It’s always a controlled action; we do our homework ahead of time, and we don’t put any more money on the table than we think we can for a bank our size,” Mitchelson said.

The Salem Five Financial Network, with more than $100 million in capital, is also working on plans to establish high-tech Salem Five micro-branches in the city, according to Mitchelson. While the advanced offerings and more central locations will no doubt draw more customers, Mitchelson stressed that the bank aims to remain a smaller institution in terms of personalized customer service.

“It’s necessary to expand monetarily for technology. You have to get large so your operating costs are lowered and so you can then offer better rates for your customers,” he said. “But we will never lose the smaller bank’s desire to be of assistance to our customers.

“This is the wave of the future. Everyone has to be in on this,” he added.

Mitchelson also emphasized that this new branch is a merely a matter of new presentation of the myriad services already available at Salem Five.

“We’re expanding our commercial lending capabilities. We’ll have Clippership Financial Services, and a broker dealer will be there for folks who want to do 401(k)s,” Mitchelson said of the new branch. “But in terms of services, we already offer every product under the sun … This is more of a delivery initiative than a product initiative.”

Mitchelson has no qualms about undertaking this new project.

“We have the technology. We have the experience,” said Mitchelson. “We’re risk-takers. We’ve done extremely well in the past.

“The risk truly is not keeping pace. If you don’t keep pace, you will be obviated by technology and by mega-banks,” he said.

Salem Five’s Newest Site To Be Physical and Virtual

by Banker & Tradesman time to read: 4 min