How Bob Jones of Atmore, Ala., turns the safe-deposit business on its head.
By Steve Cocheo, executive editor,
Alabama bank creates “personal storage service” to meet customer need for off-site backup
Hurricane Ivan, the strongest Atlantic storm of 2004, caused billions of dollars in damage in the Southeast.
Banker Robert R. Jones III experienced some of the widespread damage directly. Two branches of his United Bank, Atmore, Ala.—situated close to the Gulf of Mexico—were destroyed by Ivan.
Afterward, the $488 million-assets bank conducted customer focus groups regarding the storm’s effects. It found that while most people know to stock batteries and other supplies, and have evacuation plans, Ivan underscored the need for “financial evacuation plans.”
The bank put such a plan together and publicized it, so customers would know a quick way to bring important papers, account numbers, and such with them if they had to get out fast. But because even with a plan, originals can be lost, destroyed, or misplaced, the bank realized there was an unmet need for backup storage of documents, as well as other personal effects.
London brings inspiration
The obvious solution—the safe deposit box—wasn’t the answer. The bank had long offered safe-deposit service, says Jones, United’s president and CEO, but it hasn’t been all that popular.
“Maybe this is a Southern thing,” he says, but his customers don’t care for all the rigmarole that accompanies safe-deposit service—dual keys, employee involvement, etc.
“We have become a society of convenience,” says Jones.
The problem kept percolating in Jones’ mind. Finally, during a trip to London, he found the answer.
In his strolls through London, Jones kept seeing people on the street sliding plastic cards through readers at the doors of offices that weren’t banks.
“What they were doing was accessing self-storage centers,” says Jones. These locations look pretty much like private post-office box centers, except instead of handling mail, they provide access-controlled storage bins.
“Why can’t we do that?” he thought.
Not surprisingly, there were some barriers, both in terms of insurance coverage and regulation. But the concept finally won through.
“Personal Storage Compartments” debut
The company introduced its “Personal Storage Compartments” in its first location in February 2007. The compartments are comparable to the security safes found in many hotel rooms, except they are ganged together in rows and columns. Jones says that they are large enough to hold a laptop computer. Access is via a four-digit security code.
The bank does not make the same promises that it would about traditional safe-deposit service, because customers simply walk into the storage room without having an employee accompany them.
Usage of the storage units varies. Some small business customers are using them to store backup computer media, while homeowners are using boxes for storage of originals, or duplicates, of important personal papers, such as fire insurance policies—things that might be destroyed in the very events that they cover the user’s home for.
“It spreads your risk around,” says Jones.
The storage boxes are fire-resistant, though not fire-proof. And the boxes are not water resistant, but then neither are safe-deposit boxes.
The bank makes no warranty of privacy, and maintains a security camera in the storage service room. Jones says concerns about illicit use of the storage boxes is addressed by requiring that the user be a checking account customer first.
Of the two locations where the bank has installed personal storage service to date, one has 65 boxes and the other 77. In both offices, about half of the boxes have been rented thus far. Annual rental comes to $100, the same price as safe-deposit service.
Jones says that while safe-deposit service won’t be removed wherethe bank offers it, all new branch locations will feature personal storage service instead. BJ