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Oct 21
2011
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HOW DO YOU MEET CONSUMER BANKING CHANNEL PREFERENCES?Posted by Steve Cocheo in Pass the Aspirin The Blog   |
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The Headache: Recent ABA research indicates that bank customers overall now prefer online banking more than all other channels combined.
Our Question: Does this jibe with your market? And how will it affect your strategic planning for delivering service?
Come see what other bankers think, and add your own views
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How are you meeting the ever-expanding appetite for new channels to do business with your bank?
Bank customers now prefer online banking more than all other channels combined, an ABA-backed survey found in September. We asked prescribers how this jibed with their local markets and how it would affect their approach to customer service going forward.
Below is a sampling of what we've heard from community bankers. Add your own ideas and suggestions.
You can catch up on the ABA research, after you read bankers' comment below, here.
Let's hear your views and ideas below! (Editorial Note: Contributions to Pass the Aspirin may also appear in our print edition. While we will ask for your e-mail address, this is only as an aid to verifying identity and will not be used for any marketing or promotional purpose. The e-mail address will not be published.)
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Jeff Smith, chairman and CEO, Ohio Valley Bank Company, $827.5 million-assets, Gallipolis, Ohio
said:
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Internet banking seems to be the preferred channel in our market areas. Teller transactions are declining, while transaction accounts and online activities continue to grow. Our electronic statement sign-ups, for example, are up over 400% in less than a year. These trends have us asking ourselves, what?s next? So, our bank formed a GenNext Advisory Board of young professionals to tell us how they like to bank and how they expect a bank to look, feel, act, and interact. The insight to be gained from this demographic has been extremely valuable. Our staff is seeking to develop creative branching ideas, along with electronic banking product offerings, while learning to communicate with our customers in a whole new way. |
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Chip Register, senior vice-president and chief information officer, The Fauquier Bank, $598.5 million-assets, Warrenton, Va.
said:
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Internet banking has clearly become the service channel of choice for our bank?s customer base. We are working to achieve account penetration rates of 75% over the next couple of years. We have made ongoing development of internet banking and ancillary services (e.g. A2A?account to account; P2P?person-to-person; billpay; ACH, wire) a critical part of the bank?s strategic direction. Yet while we fully expect to witness growth and adoption of the online banking service channel, we do not see this materially impacting our customers? need or desire to visit a branch. It is the ?tyranny of ?and?.? Our customers desire a feature-rich online banking experience and the ability to visit the local branch. Over time our branches will reduce their physical footprint and create an internal environment that departs from the traditional teller line. |
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Rheo Brouillard, president and CEO, Savings Institute Bank and Trust, $932 million-assets, Willimantic, Conn.
said:
| Over the past few years there has been a steady decrease in the number of in-person branch transactions, while correspondingly there has been a regular and steady increase in the use of internet banking. We have experienced a 5% decrease in the number of in-branch transactions when comparing the first six months of 2010 and 2011. The number of consumer online banking users has steadily increased, on average, by about 100 customers monthly, with 31% of our customers currently using this service and 51% of these online banking customers utilize the bill pay feature. In what is becoming an ever-increasing trend, 10% of all monthly online banking sessions are now accessed using a mobile device. | |
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Ron Butler, president and CEO, First Financial Bank, N.A., $762.9 million-assets, Abilene, Texas
said:
| Only a portion of our customers prefer the internet. We intend to serve these customers well through continued improvement of our internet banking channel. But we also plan to build branches and use our sales people to contact our prospects in person and by phone. | |
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Dane Cleven, chairman, president, and CEO, $423.6 million-assets, Community Savings Bank, Chicago, Ill.
said:
| We find internet banking has been a service that helps us cement relationships with customers, rather than grow the customer base. Though my evidence is anecdotal, I wouldn?t say that internet banking is the preferred channel for our customers. But, it is growing in popularity and it is a good product to offer for those who would like to take advantage of banking on the internet. Our office does not have any branches, so internet banking provides a good avenue to continue to serve customers who move away from the office. And, providing the service is less costly than following customers with brick and mortar. | |
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Mike Murphy, executive vice-president/CFO and cashier, First American Bank, $299.6 million-assets, Norman, Okla.
said:
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We spoke at length regarding banking channels in our annual strategic planning meeting?physical facilities including equipment, web, and mobile access points, and what it would take to go to our customer?s places of business. It is staggering to think that 15 years ago, telephone banking became prominent. Then 10 years ago?internet banking; 5 years after that came remote deposit capture; a few years ago?mobile banking. During all that time, banks were building branches at a record pace, too. Time flies when you?re having fun or dealing with channels. The moral of my reflection is how quickly things will change in the next three to five years. Will branches still be relevant as check and cash use wane? Will web-based banking still be relevant or will we all be using our mobile devices? Will we use those same mobile devices for payments?now that debit cards are less profitable? And how do community banks become players in the mobile payment game? My opinion corresponds with many others?branches will be less relevant. In the near future, if your bank does not have online access for opening accounts, applying for loans, and guiding your finances?you will be behind. If those online channels are slow or cumbersome, your customers will leave you. The physical facilities need to consist of helpful bankers who know their stuff, who can help customers use technology within the center and outside the center to manage their resources. And banks need to mine their own data and the databases of others to identify customers? needs. This is truly an exciting time in banking. |
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Tamme Byers, branch president, Woodhaven National Bank, $416.8 million-assets, Rhome, Texas
said:
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Internet banking, as well as other emerging technologies, are the preferred customer product at this time. Our branching philosophy is somewhat different than most banks. It is centered around people that are connected to a defined area and their relationship to that particular community; the people connection is the main driving factor for our branching philosophy. Technology is our market tool to retain our customer base. As a community bank we are dedicated to customer service and our products, especially the technology driven products, are key to our success. Our strategic plan calls for expansion to a mobile banking product as well as updating our website and internet banking products. We are not always able to provide every product that the large banks offer. However, we feel that if we choose products that are well delivered and have superior functionality for the majority of our customers, then we can compete. We are not always first to offer the latest and the greatest, however we do keep abreast of emerging technology, especially when it gives us the ability to help level our playing field. |
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