Online banking services like Capital One 360 and Charles Schwab have been fully digital for years, but the explosion of tablets, phones and constant connectivity has brick and mortar banks rushing to catch up.
This digital arms race is born from customer demand to have everything at their fingertips. The challenge is banks are subject to far more regulation than other online businesses, so the buildup is slower.
One bank, Massachusetts-based Eastern Bank, which entered the NH market after acquiring Centrix Bank, is taking a cue from the tech startup world. It created Eastern Labs in April specifically to create and acquire new technologies.
“It’s essentially a tech startup within the bank that will build new technologies to gather and analyze data on how customers interact with their money and use it to develop new technologies for the financial services industry,” says President and COO Bob Rivers. “We process 93 million transactions a year. Despite this tremendous store of data inherent in that, we’ve never used it.”
Transforming Branches
While the movement toward self-service and mobile banking is driving the banking industry, physical branches aren’t vanishing, but they are changing.
“Technology allows the credit union to engage members through a variety of channels so it doesn’t need to have a branch on every corner,” says Sue Beaubien, vice president of retail services at Bellwether, which has three locations in Manchester, Bedford and Nashua. “Technology can make interacting with us easier, but that means we have fewer at-bats with them.”
That means tellers and other front-line staff need to be ready to help members with complex transactions, as those tend to be the more typical in-person customers.
Bellwether Community Credit Union has also used technology to transform its service area, eliminating traditional teller lines so tellers can interact more easily with members. In lieu of the walls that separated customer from the teller, there is now an open area with “pods”—freestanding round desks with a computer and a cash recycler that secures money. Customers are directed to a pod and, if there is a line, members can sign in on a tablet, allowing employees to track the kind of services members are waiting for and how long they have been waiting. The credit union uses biometric technology so employees can access any open pod and with a swipe of a finger log onto the computer with all the information they need, Beaubien says.
Eastern Bank opened a “full-service tech branch” at Essex Community College in Lawrence, Mass. in October, Rivers says. The 350-square-foot branch is colocated in a pizza restaurant and includes leather seating and a “tech bar” outfitted with iPads and charging stations. When students swing by for a bite to eat, to study, or charge devices, they engage with the bank.
Bank of NH in Laconia converted to a digital teller system that eliminates customer completed deposit slips. Instead, they swipe a card and the system brings up their account information on screen. It also allows customer checks to be imaged, reducing the number of currier runs a branch needs to make to the home office, says Eric Carter, senior vice president of electronic banking at Bank of NH.
The bank is also exploring whether small “virtual” unstaffed offices with technology to fulfill most customers transactions could fill gaps in physical locations or meet increased demand in business districts, Carter says. “We’re still working on the concept,” he says.
Michael Cleary, head of U.S. distribution for consumer banking and group executive vice president for Citizens Bank, says the role of branches is changing making them less about transactions and more about advice.
“Our next wave of investment will be more self service,” he says, adding he doesn’t believe technology will entice people to visit a branch. “People will come for advice. People won’t come to us for Wi-Fi. They will come to us because they will need our help,” Cleary says.
Banking on the Go
While mobile banking is far from new, banks are investing to ensure their mobile offerings are more robust. Eastern Bank is rolling out a new platform in the summer to include apps that can interface with a variety of devices. Bellwether has invested in a variety of tech offerings, including mobile banking and online services (including loan applications), remote deposit capture (depositing checks by capturing check images on a smart phone or tablet), and offering all documents online. Bank of NH in Laconia offers mobile deposits to individuals and business customers.
Citizens Bank, which separated from parent company Royal Bank of Scotland last year, has invested $900 million in developing new technology over the past four years, according to the New York Times. That includes Fast Balance, an app that customers use on their mobile devices to check account balances, Cleary says.
Last year, Citizens, with NH headquarters in Manchester, rolled out remote deposit capture and Popmoney, which allows people to pay each other through their phones.
And it’s not just bank customers that are mobile. Banks are taking advantage of the fact that employees no longer have to be tethered to a branch.
Bank of NH employees are now able to open accounts on tablets from remote locations. Beaubien, of Bellwether, says credit union staff take tablets on the road with them to college, benefits and job fairs and provide potential customers with the same services offered in the branch.
“The branches stay the same [for level of activity] and mobile and online keep on an upward slope,” says Nathan D. Saller, vice president of sales and marketing at Bellwether.
Debit Cards on Demand
The demand for convenience and immediacy is even affecting debit cards. Bank of NH will soon produces debit cards on demand with different designs.
Amped ATMs
Even ATMs have been souped up to handle transactions normally done by a teller. The kiosk at Bellwether Community Credit Union—Transact 24—is essentially an ATM on steroids. It allows members to do any transaction 24/7 that they would do with a teller, except get coins. Citizens Bank upgraded its ATMs in late 2013 so they can scan checks to allow customers to deposit checks and access the cash sooner. Checks deposited by 10 p.m. at an ATM will be counted as a deposit that same day now, Cleary says. “It’s huge convenience for customers,” he says. And it’s paying off. Citizens has experienced a 50 percent increase in deposits at its ATMs in the past year, Cleary says.
Bank of NH began installing image-enabled ATMs in 2009 to allow the deposit of checks. Of Bank of NH’s 29 ATMs, 55 percent are image enabled, he says. The image-enabled ATMs can accept 50 checks at one time, and customers receive a receipt and a copy of every check they deposited without having to interact with a teller. “Everything is gravitating to that self-serve channel. Customers have really taken to it,” Carter says.
Current Issue - May 2024