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Tech Upgrades Boost Banks at Street Level, Backroom, Too

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Customers making their initial foray into Hamilton Bank’s new Ellicott City branch will have some questions upon entering.
They’ll also learn something new before they walk back out the door.
A more than 100-year-old institution, Hamilton Bank is considered old school in some circles, but it’s tightening its embrace on technology as a way to enhance its customer experience.
Its new concierge service model features multiple avenues for customer interaction, including six flexible spaces, like a smart bar to check balances, pay bills and learn about new products; and The Pod, which facilitates cross-functional employee (as opposed to teller) interaction with customers in a more expedient manner because the employees aren’t counting money.
Small businesses and entrepreneurs also can enjoy the new work spaces the branch provides, or they can meet with an employee in a private office. There are other accoutrements, such as free, secure Wi-Fi, a TV that features the news and educational tutorials, and promotes bank products; and even a wet bar, all in a mod atmosphere with natural light.
Ellen Fish, an executive vice president for the bank, likened visiting the Ellicott City branch to stopping by an Apple store. “It’s about human interaction,” she said, “but also about computers and devices that expedite the customer experience.”

Serving Markets
The new accommodations, said Fish, are intended “to accommodate all customers: baby boomers, Gen Xers and millennials. We don’t want anyone stuck behind the teller line anymore.”
The Ellicott City branch is Hamilton’s guinea pig, as it’s the first of seven branches that will feature this futuristic approach. They may be slightly different in each market, she said, “depending on the needs of each community after we analyze customer and census data.”
Fish said Hamilton is also focusing on technology for its backend operations.
“We’re looking to process payments more efficiently, and we’re also looking at Zelle and Venmo (which are similar to PayPal) as alternate methods of allowing customers to exchange money, as well as speeding up the approval process for loan applications.”
Howard Bank is also making inroads with this newer way of assisting customers, with a new branch in Remington, in Baltimore City, that also will feature the concierge approach and three cross-functional employees.
“I think the norm in recent years has been to employ five or six staffers in a bank, but we think that’s an inefficient use of employees,” said Wade Barnes, Howard senior vice president, director of marketing and product innovation, who added that the bank is also rolling out nCino, a small business lending platform that expedites response time for loan applications.
Kevin Stehl, vice president of marketing, product and digital for Linthicum-based SECU, knows the drill. SECU operates 22 branches.
“Most of our branches are part of the newer model, in some way, shape or form,” said Stehl. And like Hamilton, SECU’s Ellicott City branch is more of a “personal interaction model, while others may offer certain technologies that are tailored to that particular market.”
What’s happening from SECU’s perspective “is the implementation of a two-part strategy,” he said. “There is a shift in technology for members who do not want to go in to the branches, so we’re moving to new platforms.”
And much of the shift is spurred, of course, by smartphones and tablets; so SECU loan applications are available on mobile devices and its web site became mobile-friendly earlier this year. More updates are planned for 2018.
And, as discussed, the branches are just part of the tech updates. “There is a general shift toward cloud computing for backend needs, so [SECU has] fewer mainframe servers on site,” said Stehl, a former employee of ING Direct, adding that, “Large-scale banks are going completely to the cloud.”
He acknowledged that long-time customers who once kept records with a few strokes of their pens to a passbook might be a befuddled, or even intimidated, by the higher tech approach. “That’s why we need people to work in the branch,” said Stehl, “to teach customers about digital and show them how it can improve their lives.”

Working the Shift
Banks at all levels are at least feeling the pressure to become more tech savvy.
“Banks, whether they’re large national or regional entities or community banks, are experiencing a shift in the way customers and businesses interact with them,” said Joe Thomas, president and CEO for Columbia-based Bay Bank. “They want more channels, not only in the bank, but at the ATM or via their computers and mobile” devices.
That’s led to “a drop-off in customers visiting the branches,” said Thomas. “As a result, banks are wondering what to invest in, and they’re concluding the answer is technology.”
How can they make that happen? “Close branches,” he said. “In our case, we’ve closed or merged branches that we’ve acquired via our (multiple) mergers, then we have upgraded our remaining branches to feature not tellers, but salespeople.”
So instead of printing paper, “our mortgage bankers can use an iPad to show various solutions,” Thomas said. “The reality is [the industry has been] disrupted by a variety of online financial services that are pushing traditional banks to stay ahead of the game.”
And Thomas thinks that’s a good thing. “Competition makes us better, and it’s coming from the front end, meaning the branches,” he said, “as well as the streamlining of processes on the back end.”

Easier Banking
Paris Roselli agreed. The senior vice president for M&T Bank said that online financial technology (or FinTech) companies, like Kabbage, which provides funding directly to small businesses and consumers through an automated lending platform; or Venmo, a mobile payment service owned by PayPal, have been using the “bank plumbing” to get between the traditional banks and customers.
“Two things have happened,” said Roselli. “Many people in the industry got nervous about technology separating banks from customers; and banks have a more stable regulatory environment, which became very demanding after the crash of 2008. So enhanced technology was needed to make life easier with the regulations so tight.”
What’s happened during the past 18 months is a switch to “provide services in a more symbiotic way,” Roselli said, noting that M&T will also begin to feature Zelle in 2018. “What’s interesting is the banks are moving back toward focusing on customer need.”
Rob Morgan, vice president for emerging technologies for the Washington, D.C.-based American Banker’s Association, is “amazed” at what’s happened in the industry since the debut a decade ago of the iPhone, “and how it’s changed everything we do. It’s no surprise that people expect the same at the banks, even in the branches.”
Morgan seconded Thomas’s observations that the banks are investing in technology, “like taking a picture of your check and depositing it via an app that can also monitor your spending and help you reach financial goals — with basically the same conversation one might have had with a banker in a branch.”

Smooth Transactions
As for the bank employee angle, “People think technology is putting people out of jobs, but we see it as more as an enabler,” Morgan said. “It allows you to take mundane duties out of a teller’s hands and make time for discussion of important subjects concerning the customer’s financial future.”
If there are ever employee-less branches, he said they “could coexist in the same market with mostly staffed branches, but the traditional branch experiences aren’t going away. We’re just trying to make it easier to take care of the day-to-day tasks.”
“Our parents went to the bank branch twice a month, then by the ’90s, it was the ATM,” Roselli said. “Then came the Internet, followed by phone banking that has led to interaction on the spot, to the point that your smartphone can tell you when you’re spending too much in a restaurant.”
And so it goes. “Then it’s a Fitbit, and now even appliances in your home. So, not only is the bank woven into one’s daily affairs, it’s part of the Internet of Things. We’re making banking more frictionless. People interact multiple times a day,” he said, “but they don’t really think about it.
“And that,” said Roselli, “is the secret sauce.”