As KeyBank eyes reducing offices nationally, reaffirms commitment to downtown Cleveland:

CLEVELAND, Ohio — KeyBank will look to reduce its real estate footprint nationally, but CEO Chris Gorman is adamant that the bank is committed to downtown Cleveland.

“We aren’t going anywhere,” Gorman said. “Key Center will remain Key Center. My office will remain here.”

KeyBank is embracing work-from-home and hybrid work models in the wake of the COVID-19 pandemic, Gorman said.

As the company shifts to “mobile by design” employees, it won’t need as much square footage across the country, Gorman said. He said there’s opportunity to shrink Key’s non-branch footprint by 25%.

Those plans don’t include Cleveland, he said. Gorman said KeyBank will continue to have a significant presence at Key Tower, the Higbee Building and its Tiedemann location in Brooklyn.

A KeyBank spokesperson told cleveland.com in December that about 20% of the company’s 17,000 employees worked from home, and and another 30% spend about three days in the office.

About 1,000 KeyBank employees assigned to the downtown Cleveland headquarters and other Northeast Ohio offices continued to work remotely at that time, he said.

Gorman said the company has recently made significant investments in Key Tower and its other local offices to adapt them to new work models. The office, he said, will be a place for training and interaction between employees.

The future of physical branches is also a moving target as KeyBank invests in and grows digital banking.

In March of 2021, KeyBank launched a digital bank for medical professionals through Laurel Road, a KeyCorp subsidiary. Gorman said 75% Laurel Road’s new clients are outside of KeyBank’s 15-state footprint.

Still, Gorman said there will be a place for physical banks. People will do daily transactions digitally, but prefer advice on home-buying, retirement and other large decisions.

“It remains to be seen what the optional mix digital and physical is,” Gorman said.

He said KeyBank will continue to close locations and open news ones and stay roughly at the 1,000 branch number. In the future branches may be further away from each other, but spread across a wider geographic footprint, Gorman said.

The company will also continue to acquire businesses to get more digital-technology, Gorman said. This year KeyBank bought XUP Payments, a business-to-business payment platform, and AQN, an analytics-driven consultant firm.

It purchased Laurel Road in 2019, and the results have exceeded expectations, Gorman said.

The company released its fourth-quarter and yearly earnings on Thursday, setting a revenue record and beating analyst expectations. Gorman said he was tremendously proud of the job Keybank’s team did.