ABA Banking Journal - August 2012 - (Page 22)
The future of
bank are done remotely or elecom Auer tells the tronically, and that about 50% of story of a colleague Platinum Bank’s customers have who began working at never been inside the bank. Both Newground, the bank are startling figures. design and building The other factor affecting the company where Auer By Melanie Scarborough, future of branches is demographis senior vice-presicontributing editor ics. “The younger generation dent of architecture. doesn’t ever want to come into The new hire’s mother, Auer says, the bank,” says Rom. “They are was aghast to learn about her 100% virtual.” Platinum Bank is son’s career choice, pointing out keeping pace with technological change, but Rom that there already was a bank branch on every coris banking on the fact that some things will stay ner and clearly no market for more. A reasonable the same. “There will be more virtual options for response, except for one small detail: Auer’s cobanking,” he says, “but there always will be the worker joined the company 40 years ago. Clearly need for a human connection.” In some cases, there was still room for, and interest in, more bankers may need to convince customers that a branches then. But is there now? real connection is better than virtual. Given the rapid advances in technology, even bankers now wonder about the future of the branch. Some believe branches soon will be obsoBuild relationships lete. Others predict they will survive, but must Applying that reasoning, Platinum Bank funcevolve. Almost no one believes that the traditional tions almost entirely as a place to discuss business model will remain, and warn that those refusing to rather than conduct it. “Where we get a real bang change will become the banks of the past. for our buck on the branch is we have a ten-to-one “You’ve got two doors to go through in bankratio of meetings versus transactions,” says Rom. ing—grow it or kill it. There is no Door No. 3,” says “There might be three or four hours in the day Ray Davis, president and CEO of Umpqua Bank, when we won’t have a transaction, but we might the $11.6 billion-asset institution headquartered in have five meetings with customers to talk about Roseburg, Ore. “Some bankers think Door No. 3 is their business.” To survive and thrive, he says, to stay the same,” he says, “but you can’t. So those branches must be used less as delivery channels institutions are going to have a difficult future....” and more as relationship-building channels. Two principal factors drive the concern about “That’s the wrong view of the world,” counters branches. One is technology. With the prevalence the blunt-spoken Brett King, author and founder of smartphones and tablets that can conduct transof online bank Movenbank (in alpha test). Deteractions, laptops and other computers that enable mining the value and relevance of branches is a online banking, and remote deposit capture devicsimple matter of following the numbers, he says. es that allow merchants to make deposits from In 1995, customers visited the branch an avertheir businesses, customers rarely, if ever, need to age of 28 times a year. By 2010 that number had step inside a bank branch. fallen to just over three times a year. By contrast, David Rom, president and CEO of Minneapcustomers use mobile banking an average of 20 olis-based Platinum Bank, estimates that more times each month and internet banking seven to than 90% of transactions at his $150 million-asset ten times monthly.
| ABA BANKING JOURNAL | August 2012
As technology and customer expectations change, so does the outlook for bank branches
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