Branching Out | By Trent Fleming
Cost-Effective Enhancements of Your Geographic Footprint
Traditional branch traffic is diminishing as customers opt for electronic delivery channels. Yet, there are options for community banks to use technology to better serve businesses and consumers, while minimizing brick and mortar investment.
ATM and Cash Vault Services
ATMs with cash and check deposit functions: Increasingly popular in areas with low-volume demand for check or small cash deposits. Twenty-four hour availability is important. The detailed receipt, containing images of checks deposited, and listing the cash denominations deposited, increase customer confidence. Empty-envelope fraud is eliminated. Siting must be done with care, but when deployed well, they improve customer satisfaction and reduce bank deposit-handling costs.
Remote ATM balancing: Allows bank personnel to balance ATMs from a central location. In conjunction with ATM cash service by an armored courier, it precludes the need for bank personnel to visit the ATM.
Electronic vaulting: Electronic vaults are placed at a customer’s location, typically in a retail environment. They function as a secure cash vault, and a cash recycler to dispense change as needed. Electronic vaults are connected to the bank, and provisional credit can be given for deposits made into the device, offering security and convenience. They’re typically served by armored car. When used in conjunction with Remote Deposit Capture, they minimize business customers’ trips to the bank.
Cash dispensers at the teller line: Similar to electronic vaults, they work in conjunction with a teller platform system, and automate the process of handling cash at the teller line. In high risk environments, they can be placed through a secure wall. In newer branch facilities, they can be placed at a desk, eliminating the need for the bank associate to walk to a teller window or vault in order to help a customer with a cash transaction.
Mobile banking: Essentially an extension of existing Internet banking functions to hand-held devices. Features customers already enjoy must be made available on the mobile device. The bank’s website must also render well on a mobile device, so that customers can quickly find basic information (contacts, hours and locations) via a mobile device. Most choose to offer three flavors of mobile banking: Apple, Android and Text. Others add Blackberry or Windows-specific apps, while some choose to simply add an enhanced browser functionality that works adequately on any Internet browser device.
What to watch for: responsive technology. Essentially, the customer points, via a shortcut, to the mobile website, and the mobile banking solution then configures itself optimally for the specific device. Expanded mobile banking functionality to watch for includes mobile bill pay, mobile capture, and mobile chat. More on these, below:
Mobile capture: Check-image capture and deposit can eliminate the need to for bank trips. While consumer check deposits have decreased, business applications remain for those businesses delivering services or goods in the field, and which often find latency in deposit due to the schedules of their service or delivery drivers. As with any newer technology, it is necessary to carefully evaluate the true value versus the initial thoughts.
Mobile bill pay: Consumers want to do more on handheld devices. Bill pay may give banks an opportunity to reclaim customer activity from billers. Apps that allow a customer to snap a picture of a bill and set it up for recurring use, give customers control over how and when a bill is paid.
Mobile chat: Younger consumers prefer secure text messaging to phone or email communication for customer-service issues. Look for this option from your mobile banking provider soon, as well as chat (if you don’t already have it) for your traditional website and Internet banking solution.
Mobile wallet and payments: The digital wallet has great potential to enhance a customer’s payment experience. While ongoing card fraud is driving the U.S. toward a chip and PIN technology, advances in mobile payment solutions may be overtaking the chip card as the best long-term solution. In my view, a digital wallet will consist of a secure application, provided by and managed by a bank, that allows a customer to input a variety of payment methods, along with clear guidelines about payment preferences (when to finance, when to pay directly, what type of rewards to earn). Upon checking out at the merchant, and likely using NFC technology for communicating with a checkout device (although bar codes have been used for this purpose) the app will make the optimum payment decision for the customer.
Remote Deposit Capture
For higher volume businesses with an average of 50 or more checks per day, this technology allows scanning deposits and transmit electronically to the bank. In conjunction with electronic vaulting, RDC can virtually eliminate the need for bank trips.
RDC also offers excellent recordkeeping, including easy access to electronic images of the deposit, the assurance that the deposit is balanced and accurate prior to transmission (no more adjustments) and may improve cash flow by offering longer daily deposit windows. The RDC software allows the bank to establish appropriate activity limits for a business, based on their deposit history, effectively controlling fraud, accidental duplicate deposit, and other such issues.
Online account opening: Modern identification and authentication techniques allow bankers to apply the same level of care to online account opening as they do to in-person events. Existing customers can easily open additional accounts; and banks can acquire new accounts with appropriate compliance measures, at a much lower cost than via in-person methods. Online loan applications can be useful for complex applications, including mortgages and commercial loans. Customers are able to enter significant information at their convenience from their home or office, then meet with a banker to complete the application process. Consumer loans such as auto, credit and even personal loans, can be almost completely automated.
The ability to offer face to face customer service via video conferencing has many advantages. At a teller line, a single teller can work multiple customers from a single location. For more general customer service, a customer can interact with a bank employee from an ATM, a kiosk in a branch, or from home. Sometimes the face to face environment is desirable for more complicated customer issues; video conferencing supported from a call center environment can support this. Finally, the implementation of video conferencing will have benefits for internal bank use as well, as a way to conduct more productive meetings without travel time and disruption.
Here are suggestions on how to deploy a remote location that allows the bank to support a new area with minimal investment in traditional brick and mortar facilities. For locations at which commercial banking relationships will be a focus, a physical office is more important.
Scenario: A modern, drive-up facility featuring a deposit-taking ATM. Messaging that emphasizes ease of banking, from online account opening to mobile banking, also aids market visibility. Depending on the safety and convenience of the location, a two-sided facility with walk-up and drive-up ATMs could also be helpful. Depending on your decisions around online lending applications, you may possible be able to effectively serve such an area without further investment.
Scenario: Establish presence and focus on commercial account relationships. A facility as described above is also a good starting point. Also add a physical office, which can be a suitably-appointed storefront, so that your calling officer in the market has a location to office out of and meet clients. When properly marketed, your other commercial and consumer product lines and delivery channels will very effectively complement the physical presence, allowing you to grow your business.
Scenario: A suitably-appointed banking facility, available for purchase, gives you a tremendous head start, as it is designed for the things you wish to do. Priorities are ATM services and consumer and commercial presence. Do not create a traditional branch model. Instead, leveraging the technologies discussed, the facility can serve as a base for commercial banking officers, a location to serve retail customers, and a focal point in the community for your branding. The office location will help determine the optimum ATM location, whether in the office or elsewhere that has better visibility and traffic flow - in the community. Associates who staff this facility should be well rounded and able to address all of a customer’s banking needs, from deposits to loans and beyond.
Markets are different, but it is these differences that offer you the diversification that you are looking for. Each situation has to be evaluated in light of the criteria suggested above.■
Trent Fleming is a consultant to the banking industry and helps clients analyze specific situations and formulate appropriate strategies. He can be reached at email@example.com.