In today’s fast-paced, technology-fueled environment, three years of time in banking can eclipse a decade or more when compared to the past. Even during the sluggish economy from 2008 until late 2016, vast improvements were made in banking technology, which birthed a new generation of bank channels and products. At the same time, cyber-crime exploded and placed just about every bank and their clients at risk. Unfortunately, many small banks had to spend their time and capital dealing with an increasing regulatory burden and were not able make all of the technology improvements to their product delivery channels that they would have liked. Then, the macro-economic environment began to change in the fall of 2016 and now is the time for community banks to make the necessary upgrades to their systems, product delivery channels, marketing and cyber-security measures that the market place demands. If your bank is ready to embark on this journey, the strategic planning process is a great starting point.
"As old technologies fade away, there is constant innovation occurring in the FI space to create new products and service"
More than three years ago and during our strategic planning meetings at Forcht Bank, we determined that our growth and ability to thrive would be the result of how well we operated in the digital age. As a $1 billion community bank serving both extremely rural and metropolitan areas of Kentucky, we knew that there could be different levels of acceptance to the manner in which we delivered our products and services. We also knew, however, that maintaining the status quo was not the answer. In the end, the decision was made to have the best technology, product delivery channels and the like that we could offer. Our strategic planning process continued with this determination in mind.
Over the past few years there have been many articles written about dramatically changing the retail branch. From the aesthetics to the layout, to product channels and even staffing models all have been identified as critical issues to review. When reviewing Forcht Bank’s overall retail design and strategy, we quickly turned to ITMs—interactive teller machines. Utilizing ITM’s in a branch drive-thru allows for the expansion of banking hours for your customers. This is accomplished by having a centralized teller team that covers multiple ITM locations throughout your geographic footprint. Your ITM teller staff can work a normal eight hour shift, ten hour shifts or part-time. Since ITM’s had the capacity to perform 90 percent plus of the normal transactions one might need in the drive-thru, expanding hours can change the time your customers come to the bank. The ITM experience is often better than one might have with a typical drive-thru teller. The communication is clear with no audio feedback from dated speaker systems, and now the ITM tellers can interact with their customers face-to-face. Bank clients utilizing the lobby have a better experience as well. With no distractions from noisy drive-thru operations, the bank staff can focus on the needs of their lobby customers providing a better level of service.
Cyber-crime and other fraud continue to plague the banking industry. There are a number of security enhancements available today that customer’s appreciate and are available to banks of almost any size. Thumb print authentication for mobile banking, palm vein authentication for lobby transactions and retina authentication for multiple delivery platforms are all available. ITM’s, as described above, can help fight fraud issues too. The latest ITM’s are EMV certified. In addition, client sessions are recorded for quality control and to protect against potential fraud. Credit and debit cards have security features available that your tech loving customers must have. Customers can not only receive text or email alerts about charges, but apps are available that allow the consumer to turn the card on or off, limit the amount of specific transactions and to allow purchases only at certain merchant types. At Forcht, we have been using the thumb print authentication for some time and continue to explore the palm vein and retina scanning options. Our clients are adopting the text alerts and card management tools at a rapid pace. What is so great about improving your cyber-security and fraud prevention options is that this makes for excellent marketing strategies.
How to properly market your institution in a digital world is a challenge. The youngest generations prefer to use channels reliant upon a mobile phone or tablet. Mobile usage begins to decline in percentage as the customer age increases; but overall, mobile use continues to grow in all age categories. Gone are the days where you just needed a web presence. Now, your website is your advertising and marketing face to the consumer. Is your page responsive to different device screen sizes? Is your website a vertical scroll format which lends it’s a mobile-first design? How few clicks does it take for a consumer to find what they need and/ or complete a transaction? These are just a few of the issues your digital marketing experts must face. The good news is data is available down to the click! Having a Digital Banking Manager or similar individual can be helpful in this area. This manager can have all the data at their fingertips on number of site visits, what pages the user viewed, and even how far the consumer goes to complete an application for a loan or deposit account. Links to ancillary product lines can often be used on your institutions page. Efficiency and speed are the game changers for customer acquisition and retention.
Your institutions journey in the space of high-tech and digital banking is most likely similar to ours at Forcht Bank. As old technologies fade away, there is constant innovation occurring in the FI space to create new products and service. And while innovation is occurring, some things never change. So while we all modify our websites to be responsive for tablets, smart phones and traditional desk top usage, we are still on Facebook, Twitter and pop-up ads. Print media, radio and television are still some of the most widely consumed forms of mass media. But let’s be honest–the phone book has to go, unless you need to even out a break room table. Branch consolidations will out-pace new construction, but what is built will be smaller, more efficient, and high-tech. Lastly, it is time we all update our cyber-security and fraud prevention products/services. Customers will demand these enhancements and others as they begin to understand their benefits.
It has been just a few short years since Forcht Bank really concentrated on technological advances in all areas of our strategic planning process. Most of our strategies have come with a cost, and your institution will experience the same challenge to balance needs versus wants. In the end, the cost to not adopt some of these technologies out-weighs the true out-of-pocket expense. How will the banking scene look in another few years? One that is molded by the changing digital world is the clear answer.