Mobile banking, e-banking, remote deposits, lending communities. These are the building blocks of the emerging community bank – an institution that hardly cashes a check and may not see a physical customer except for a credit interview or a financial planning consultation.
What will be the business model for this new institution? Certainly lending will be part of the equation as well as anywhere/anytime access to funds. But blog discussions? Mobile deposits? These are new areas for banking. How does the community bank find a new model and transition to it?
Years of banking should have taught us that consumers are not a homogeneous bunch. The years ahead will reinforce that point again and again. Can we really expect the Internet experience aimed at Boomer customers to be the same as the experience aimed at Gen Y?
The fact is, bank markets consist of many groups which adopt new technologies and shed old at different rates and for different reasons. In times of dramatic change, such as our current banking environment, it makes sense to know your customers like never before.
Fortunately, our traditional reports can be elevated to true business intelligence. Instead of listing information, today’s information delivery can graphically display exactly what needs attention at your desktop. Live reports of staffing levels at all your branches, which delinquent loan customers are making payments and who among your branch personnel are referring today’s lead product are all available today.
The principle of “Information Now” can even feed live data into PowerPoints and spreadsheets. Can you imagine? Completely up-to-date information every time your bank delivers a presentation. That will be critical for growth and operational efficiency in the emerging community bank landscape.
The “Information Now” principle is well-served by the current Internet technology – Web 2.0. It’s the backbone of webinars, blogs and self-updating web pages. It can bring life to online discussions and help your bank communicate with its customers as never before.
Suppose a customer wants to review his credit options for financing his three childrens’ college educations? Sure you can bring him into the office. But you could also conduct the meeting remotely – showing charts that illustrate the customer’s situation and options online while you’re talking.
Can you imagine how many more customer meetings you might conduct using this technology? Can you imagine how many more product sales? These are some of the tools that can cement profitable relationships in the years to come.
They’re also good for cultivating Gen Y customers who are comfortable communicating via online chat. What a great way for your bank to connect with an important constituency and begin to make them yours.
If you think mobile banking is just a Gen Y phenomenon or a shrunken version of Internet banking, think again. Everyone has a cell phone – from middle schoolers to senior citizens. Everyone has banking needs that are unique to cell phones.
For example: you’re in Omaha on business, and you need to see if a check cleared so you can pay a bill. Or you need to verify a key piece of loan data while you’re on the road. These are just the tip of the mobile banking iceberg.
With success in Asia, mobile banking will gain ground quickly here. Remember that more of your customers have intelligent cell phones than Internet-connected computers, and it’s only a matter of time before those customers become convinced that mobile banking is more convenient than computer-based banking.
If your blood is beginning to race and your head is beginning to spin, that’s good, for there are many more forces at work in reworking the community bank. Green will be a major factor as it moves away from a purely “use less” strategy to a major consideration in collateral valuation.
Community banking is once again evolving. Decide which way you need to go, then build your new business model so you can prepare for the future.