Human Touch

TouchingScreenCommunity banks are faced with a tough situation. Due to mistakes made by large mega banks, all financial institutions, including community banks, are encountering increased federal regulations.  The increased federal regulations bring increased operating cost and causing banks of all sizes to cut cost in other areas.

One way mega banks are trying to decrease expense is by replacing tellers with self serving kiosks. These kiosks are high tech machines that are similar to kiosks at airports.  These kiosks can do virtually anything:

  • Handle cash and check deposits
  • Withdrawal cash
  • NCR scanning capabilities

JPMorgan Chase is currently leading the way with these kiosks and have already added several of these machines in their branches.  The organization has stated customers enjoy using it and plan on expanding the service throughout the entire company.  This is causing other financial institutions, including community banks are looking to follow suit.

But if community banks follow this trend, will they be shooting themselves in their foot?

Don’t get me wrong, I am not trying to build a debate against kiosk or even suggest it’s a bad idea for mega banks.  Heck, I have used kiosk before at airports and have been satisfied with them.  But is this the approach community banks should use?  After all for years community banks have prided themselves on customer service and personal touch.  Community banks can avoid a negative perception by considering other technology alternatives.

Negative Perception

Banks are already seen as emotionless and robotic.  Why add fuel to the fire by phasing out tellers with a kiosk?  Why not focus on building up your staff.

  • Education and Development: By providing training to your staff, you can start building your team internally.  Product knowledge, soft skills training, and learning how to uncover needs are three education programs a bank can start implementing. Another approach is teaching your tellers how to open accounts so that when the time is necessary, they can assist customers with that need and eventually be promoted.
  • Cross Selling Opportunities: How effective is a kiosk with cross selling?  People who constantly interact with someone will get to know them overtime and can offer solutions that a kiosk may not be able to uncover during a transaction.
  • Customer Service: When you need help solving a problem, what makes you feel more comfortable: speaking with a knowledgeable person or typing into a kiosk and searching for an answer?

Other Technology Alternatives

I understand the need to cut cost, but why not look for ways to cut cost and provide an outlet to communicate to customers.  Here are two examples that not only allow you to enhance customer communication, but can also provide direct advertising opportunities.

Electronic Statements

Electronic statements are a “greener” way to deliver information to your customers, while reducing expenses.

  • Cost Benefit: Save the cost of printing paper and paying for postage.
  • Customer Communication: When sending the email notification to your customer, add customized text that can promote a service or upcoming event at your office.

Mobile Banking

Depending on what type of mobile banking service you offer your customers you can receive a number of benefits.

  • Cost Benefit: Potential to reduce “account balance” phone calls to your offices; which allows staff to focus on other task.
  • Customer Communication: Provide push notifications about account balances, upcoming transactions, or special product pricing.

Finding ways to cut operating cost is essential in any business.  Just don’t loose focus on customer service when reducing cost otherwise you may end up reducing the number of profitable customer you have.


What is Mobile Banking?

confusedThe latest craze in banking is mobile banking.  Just about every bank and credit union has a mobile banking app; but what is mobile banking?

Recently, while driving down Kingston Pike, I noticed a competitor had an advertisement outside their branch that read:


Curious about what our competition was offering, I stopped in the branch and asked the customer services representative about their apps.  She had no idea what apps her credit union offered.  She asked the woman working the drive thru, who then clued me in on what apps they offered.

We have one for the iPhone and one for the Smartphone.

I then asked what the other app was since the sign suggested there was more than one app available.  She then informed me that there were two, one for the iPhone and one for the Smartphone.  I then asked her if she meant “Droid” instead of “Smartphone.”  She quickly agreed, and realized that her Credit Union only offered one kind of app, it was just available for two different smartphones.

It may sound like I’m picking on one competitor, but the fact is the term “Mobile Banking” has become so grey that not even people in financial institutions fully understand what it is.  Here’s a quick breakdown:

  • Mobile Website: Exactly what it says, when you go to a bank’s website via a smartphone, you see a formatted site specifically created for smartphones.  Typically these sites have less links, an option to sign in to Internet Banking and a link to the bank’s “full site.”
  • Mobile Banking App: In its most generic form, an app that gives you immediate access to your bank accounts.  Some banks are starting to offer account aggregation options with their mobile banking apps.  Account aggregation allows you to access bank accounts you have at other financial institutions.  In other words, customers can get a total picture of their finances.
  • Mobile Deposit: An app that allows you to deposit your check just by taking a photo of it.  This is a convenient app that can reduce trips to the bank.  How cool is that?
  • Mobile Cash Management: A fairly new app being offered by banks.  It’s an app for businesses that allows business owners to streamline their cash flow.  This can vary based on the type of cash management tools a bank offers.
  • Mobile Merchant Services: Perhaps the most popular example of this is Square.  This allows people to accept credit card payments with their smartphone or tablet.
  • Mobile Wallet: Exactly what it says, an app that works like a wallet.  You can store coupons, purchases and other information in this new “wallet.”

For people working with banks, be sure to find out what your current bank (or future bank) truly offers when it comes to mobile banking.  What kind of apps are available?  What security measures have they taken?  These are just two important questions people should ask their banker.

For people who work for banks, or credit unions, create some sales training and look for opportunities to educate you team about this trend.  There is no doubt that mobile apps are growing and can be a great way to improve or expand your relationship with your customers.

Welcome to the future!

Big Data vs. Your Data

shutterstock_1166971421BIG DATA is the latest buzz word circulating around marketing and banking professionals. People keep stating that BIG DATA is a “game changer” and that you must find an expert to help you translate that data into big profits for you business. For those who are in the financial industry, consider this; before you go deep-sea fishing in big data, consider your own little pond of data first.

Industries like community banks have a huge advantage. For example, when opening a checking account or closing a loan, banks are required to collect information from customers. Information like addresses and credit scores must be obtained by lay.  In addition to that, this information is stored all in one location. Think of all the opportunities when it comes to target marketing.

  1. Direct Marketing:  Not only do we have customer contact information, but we also know what services they already have.  These two pieces of information can lay the groundwork for a direct marketing campaign.  Businesses dish out money to gain home addresses, phone numbers and email addresses; and we already have this information on file.  Match a list of customers who are missing out on a great service and BOOM, you have started planning a direct marketing campaign.  Now you set a deadline, roll out a schedule, create collateral and perform training.  Easier said than done, but at least the first two steps, which are usually the hardest parts, are completed.
  2. Cross Selling:  If a customer is coming in to open one account, there are several opportunities to offer additional products and services that can help your customer.  For example, when a new customer closes a loan, there are several opportunities for cross selling.  You know if they can qualify for a credit card, you can help them open a checking account (with a debit card), assist them in starting a savings account…and on and on the list goes.

The great thing about using the data you already have is that you are working with people who already know your business.  There is no need to start from scratch, the customer has chosen to do business with you company.  Create a relationship and build on it!  The important thing to focus on is how can the new service benefit both the customer and the bank.  You don’t want to give out loans to people who you know cannot repay them.  You also don’t want to force a service on somebody that doesn’t really need or want it.  Find a situation where both your business and the customer walks away a winner.

By doing this, your company will do right by your customers and this in turn can create referral sources from customers via their friends, family and coworkers/staff.

It may not be BIG DATA, but this can lead to BIG PROFITS.

Convenience: Old Verses New

When I first became a community banker, people would ask how many locations the bank had in town. When I told people over twenty locations, with five in Chattanooga, they would say something like this:

Only five? That’s not convenient. Amsouth has about twenty locations around Chattanooga, and they are convenient.

True, Amsouth did have more locations, but let’s fast forward to the present: people ask different questions to quantify convenience and Amsouth ain’t around anymore.

Now, I work for a community bank in Knoxville that has a total of four locations, but that doesn’t seem to bother most people. Especially when they hear:

  • Free Worldwide ATM Access
  • Free Online Bill Pay
  • Mobile Banking
  • Mobile Check Deposits

Most people understand the first three examples, but a few have not hear of Mobile Check Deposits. This mobile app allows people to deposit checks into their bank account by simply taking a photo of the check. Talk about convenience!

This new mobile app (only available at four different banks in Knoxville), is a global trend that is defining the new convenience of banking. This new convenience is due mainly to the increase of mobile technology, and even companies outside of the traditional banking structure are benefiting. Paypal, Google and Apple all have virtual wallets that are slowly starting to break down the old convenient view of banking…to the point of replacing the need for a bank all together; unless there is a need for a loan.

Who knows, if Paypal merges with a lending company like Quicken Loans or Discover, then there could be an updated version of the new convenience.

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