Category Archives: Technology

Make Cyber Monday (and every cyber day) Safe

Since the advent of Cyber Monday in 2005, online shopping has exploded. According to John Sileo, a leading expert on identity theft, online shopping can be routine and safe as long as you follow a few simple rules. One rule he doesn’t explicitly mention in the above-mentioned article is using Mastercard SecureCode to protect online purchases. SecureCode is a program created by MasterCard that allows debit and credit card holders to register their cards in order to add another layer of protection to online shopping. Once a card is registered, purchases made at participating merchants automatically produce an online receipt and require cardholders to enter their personal “secure” code. If a code isn’t entered, the purchase can not be made.

Spending a few minutes registering your MasterCard debit or credit card can provide significant peace of mind. Visit First National Bank or MasterCard’s website for more information.

Add this step to other precautions mentioned by Sileo, and you’ll be able to shop online with confidence.

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Does your iPhone do your Banking?

Right now I’m reading a book about banking called Bank 2.0 by Brett King that feels completely out of date. It was written in 2010.

Banking is changing so fast because of technology that many banks–and consumers–may be having a difficult time keeping up. A few short years ago mobile banking (banking on a mobile phone) was a novelty. Now almost every Top 100 bank (biggest banks by size in the United States) and many community banks like First National offer mobile banking.

At FNB (and many community banks) the branch has traditionally been where all business is transacted. With the introduction of various technologies (online banking, mobile banking, direct deposit, etc) now only about 15% of First National Bank’s client transactions happen physically in the branch. The rest happen electronically or online.

I’m curious to know what your experience has been with banking and technology. Do you use mobile banking? If so, what do you like? And if not, is there a specific reason?

There are still only a few of the largest banks that offer check deposit with a mobile phone. Do you use this service at Chase, PayPal, or another institution? Does the service work as promised?

Back to Kasasa…Where does this fit into reality?

Since we launched Kasasa at First National Bank on May 9, 2011, we’ve had a great response from the community. Many of our existing clients are giving it a try and finding out this product is fantastic. We’re also seeing a good number of new faces coming through the doors at all of our branches to see what the buzz is all about.

I’ve also had a good number of friends, colleagues, and acquaintances say something like this in response to Kasasa: “Kasasa, yes, I’m still trying to figure that one out…”
Kasasa (i.e. rewards deposit accounts) does seem to fly in the face of everything a bank normally holds dear: we pay a modest rate of interest, don’t get too crazy with promotions and gimmicks, and don’t do anything that will make people wonder whether or not we really know how to take care of their money. In contrast, Kasasa pays a rate of interest most people would jump to have right now on a certificate of deposit, and we’re willing to pay it on a checking account. Kasasa is a word that sounds crazy and maybe a little gimmicky. And with the rates and the name, people may be wondering if we really know what we’re doing at First National.

The reality of the situation is that banking is changing. We are a small business, and we have to adapt to challenges just like any organization; lately it seems like we see a new challenge every time we turn around. For example, we are VERY heavily regulated, and the rules aren’t going to be loosening any time soon. Competition is also fierce as non-banks are starting to offer products we’ve offered for years. And, technology is changing the way everyone conducts business—including banking. We have more accounts and customers than we’ve ever had before at First National, but we have fewer and fewer people coming into our branches on a regular basis. As online banking, direct deposit, and smartphones become more and more prevalent, we are realizing we have to adapt in order to be successful and provide a relevant service you value.

Circling back to the original question, the reasons we offer Kasasa center around the ways we’re trying to adapt to our environment. If a customer meets three behavioral criteria on a regular basis he or she is rewarded with the high rate of interest and/or other rewards. These criteria are:

1) Debit cards – We earn money—interchange—whenever someone swipes a debit or check card. In addition, it costs us more money to process a paper check than it does to handle electronic transactions. If a client swipes her card a certain number of times (10) in a qualification cycle, then she meets this criterion.

2) estatements – It costs us money every time we generate and mail paper statements. It costs a LOT of money over time. Some estimates are that it costs more than $2/Statement mailed. In order to qualify for the account rewards, a client has to agree to receive statements electronically. The great thing is that this not only cuts costs, but also provides a couple significant benefits to our clients. First, estatements are environmentally friendly because they can be viewed online without having to be printed. Second, instead of having to wait on your statement in the mail, our estatements are accessible immediately after being generated through our online banking. In addition, the online banking site provides instant access to old statements so in essence you have an archive of statements at your fingertips.

3) The final qualification is to have one direct deposit or one automatic ACH (electronic) debit in a qualification period. One of our main goals in offering these new accounts is to develop clients who use us as their primary bank. We’d love to be the primary bank for all of our clients. Clients who have direct deposit or set up automatic ACH debits are more likely to use the account as their primary account. We’re trying to encourage that relationship.

Ultimately, in order for us to be a successful bank we need to adapt. Adapting in this case means embracing technology (debit cards/estatements/electronic transactions), cutting costs (estatements/debit cards), and growing relationships with clients so they use us as their primary bank (Direct deposit/ACH debits). This is a mutually beneficial development because we’re accomplishing our goals by offering superior products and meeting the financial needs of our local communities.
Hopefully, this helps a few of our Kasasa skeptics understand both the benefits and the reasoning behind the products we’ve introduced. It is possible for both sides to benefit in a situation like this.

I’d welcome your comments and feedback on any of this, and if you have questions about Kasasa and rewards accounts, feel free to respond.

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Picking a Bank isn’t as Easy as it Used to Be

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.

Now you can have your cake and eat it too

In the not too distant past, banking locally at a community bank probably meant you had to make a sacrifice. Sure, community banks know who you are and can better serve you because they are owned and operated locally. And, you can trust they will do everything they can to take care of your banking needs because community bankers know that helping local residents and businesses promotes growth and a higher quality of life.

But the problem has been that in order to get these great benefits of banking locally, you also had to sacrifice access to technology, variety of products, or lack of access to your money if you left the area.

Well times, they are a changin’.

First National Bank (and many other community banks) are leveling the playing field. In the last month we’ve introduced free mobile banking, launched a new and improved website, and are in the process of developing other new deposit products that will be available May 9. Most of the products and services you use at big banks are now available at the same community institutions that provide the great service and local touch you appreciate.

So come to FNB to have your cake…

Poll Results: Community Banks vs. Mega Banks

So after a long posting drought—busy fall, holidays—I’m back to share the results of the reader poll I put up in October.  I was trying to gauge how people felt about community banks products vs. the competition.  I attended a fall conference that claimed people prefer “mega” banks because of the perception they offer better products and platforms.  Based on my “conclusive” poll the results say otherwise.  Of the 18 people that responded, 10 (56%) believe community banks offer the same quality products as big banks.  Three others (17%) disagreed outright and another three (17%) said they are banking locally even though they are sacrificing product quality.  So, 10 favored community banks.  Six did not.  One other voter said that regardless of product quality she will never bank with those Wall Street giants.  The final participant didn’t care, just please cash her check.  While this is a very small sample size, it’s nice to see community banks are getting the benefit of the doubt.

Joe, a “Community Banking Today” reader, also commented on the poll and reiterated that big banks offered a lot of nice features that community banks did not.  I don’t disagree that in general big banks have the resources and technology to stay ahead of the curve.  However, I’m not ready to agree that community banks can’t match their pace.  Take First National Bank for example:  A three branch, $125 million asset community bank serving three counties in Northwest Ohio.  FNB has “real time” online banking, online bill pay with text and/or email alerts (all free), online applications for home loans, deposit and loan accounts, access to investments, ID Theft Protection products, and a variety of other banking services.  AND, we will be introducing a new website later this spring, we’ll be able to open the majority of our deposit accounts online, and we’ll be introducing deposit rewards accounts. 

While we—and other community banks—may not be on the leading edge of technology, we’re not running far behind, and we tend to adopt products and services after the experimental stage so you’re not getting an untested product that may or may not be around in the long run.  This debate will be an ongoing theme this year so I look forward to keeping you updated on our progress and adding more feedback along the way.  Thanks to those of you who participated in the poll and are regular readers. 

Poll Results:

Community Banks offer the same quality of products as a “Mega” bank   10 56%
Community Banks don’t have products and services I need   3 17%
I’m sacrificing products and services at a community bank but I want to bank locally   3 17%
I don’t care about products, I’ll never bank with those Wall Street giants   1 6%
I don’t care…just cash my check   1 6%

 

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