I was at Barret Graduate School of Banking in Memphis, TN, last week. It was a great week and I met some fantastic people and instructors from around the country. I was also reminded of something over and over again as I interacted in classrooms throughout the week: picking a bank isn’t as easy at is used to be.
I started working in the banking industry in 2002 as a front-line teller. My initial trainer–and many banking associates after that–drilled into me that banks were all the same in terms of products and services, and the only variable we could control was superior customer service. An individual could visit any bank and expect to have the same options regardless of a bank’s size and sophistication. Sure, size mattered at times because rates were typically more competitive at larger banks, but any community bank could attract customers with the occasional CD special or loan offer. And I have always been told that community banks could use size to their advantage by emphasizing local service from local people who have a vested interest in their community.
I think we’re starting to see a seismic shift in the way people do banking. And that shift is starting to–and will continue to–give community banks more substantial ways to differentiate themselves. Years ago, banks offered checking, savings, and time deposit accounts. They offered home loans, car loans, and small business loans. More recently they started offering ancillary services like insurance, investments, and trust services. But that’s nothing compared to how technology has contributed to the products a traditional bank can offer today: online banking, bill pay, and now mobile banking for smart phones. Person to Person payment (think PayPal) is available at many banks, and bigger banks (Chase, most prominently) are starting to scan checks with smart phones. By this time next year, the biggest banks–and companies like AT&T and Google–will offer consumers the capability to use their phone to make payments instead of the now traditional credit or debit card. Some of this technology will become standard at every bank (i.e. online banking). Other products will probably fade as they are replaced by other, better options (the paper check??). And it matters because banks, especially community banks, will have to determine what fits their vision and their community. Limited budgets and unique markets will force banks to prioritize what they offer and how they offer it. And that will mean you the consumer will have choices to make. You may not be able to walk into a bank and get the product you’ve seen advertised at a different bank. The bank you choose may be the optimal combination of service, product mix, and technology. And, scary as it sounds, you may come to rely on your banker as an expert on technology, at least as it relates to banking.
I’m curious to hear your thoughts. Have you seen any products or services in the marketplace that interest you? That may be coming soon to a bank near you?? Thanks for the feedback.
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