Keep Your Bank Relevant: Rapid Changes in How Customers Bank Threaten Traditional Banking. It Doesn't Have to Be That Way, Say Three Community Bankers and Brett King, Author of "BANK 2.0"

By Cocheo, Steve | ABA Banking Journal, September 2010 | Go to article overview

Keep Your Bank Relevant: Rapid Changes in How Customers Bank Threaten Traditional Banking. It Doesn't Have to Be That Way, Say Three Community Bankers and Brett King, Author of "BANK 2.0"


Cocheo, Steve, ABA Banking Journal


Jeff Smith has as much invested in the status quo of community banking as any other CEO. He's been with $826 million-assets Ohio Valley Bank, Gallipolis, for nearly 38 years, and now serves as chairman and CEO. He's a strong believer in community banking.

Yet Smith has been wrestling with a conundrum: Will banking as practiced by Ohio Valley Bank and thousands of others remain relevant? He's had some recent matters bring that to mind.

First, his own behavior. "I am certainly, by no means, a technocrat," said Smith. "But I recently realized that, while I'm in a bank every day, I do not conduct my own banking at the bank. I do my banking on the internet, using our online banking service, from home."

Second, a conversation with his 24-year-old daughter. "She's the daughter of a banker, and, at her age, she's written three checks in her life," says Smith. "And she recently commented to me, 'Dad, checks are archaic'."

Author Brett King also has a daughter, age 10. "She's a 'digital native'," says King, who is also a consultant and futurist. "She will never in her life write a check."

Now, if this was a matter only of checking, one could shrug. Debit cards and online billpay have been replacing checks for years.

But that's only part of what's going on. Rapid technological advancement has been reshaping what retail and business customers want from their banks. King summed up the challenge recently in his book "BANK 2.0: How Customer Behaviour And Technology Will Change The Future Of Financial Services":

"A staggering 90% of daily transactions are executed electronically today. Institutions that hold on to the belief that physical branches remain at the core of what the brand does, will not adapt easily to the customer of tomorrow who rarely visits a branch or the customer who sees no need for an over-the-counter transaction with cash or checks. Those who still classify the internet, ATM, and ..... iPhone applications as 'alternative' channels will be playing catch up for the next decade, while intermediaries will increasingly capture niche service opportunities .... "Understand one thing. Customers are not going back to the old ways of banking. They are moving forward. If you are not moving forward with them, then they will pass right by you--at warp speed."

King speaks of the need for banks to become "channel agnostics," meaning that "every channel is equally important, branches are just one." His perspective is also about abandoning the notion that banks are in charge. The customer is. And if the bank doesn't choose to serve the customer as they like, other players will weigh in. King writes of MoBank, a United Kingdom service operated by a nonbank third party that permits users to check balances and recent transactions with their banks and to make payments to certain retailers, all using their mobile devices. As King describes it, "the bank is just the back-end, the processor of the transaction."

[ILLUSTRATION OMITTED]

Ultimately, customer behavior is evolving. "It's not about mobile apps, it's not about mobile payments, and it's not about remote deposit capture," says King. "It's about a progressive behavioral shift. Yes, the Gen Ys like this stuff because it's on the move and it's fast. But the fact is that all of us really like it. So it's not about the devices themselves, it's about how the devices are changing behavior."

Often, futurists are interviewed in a vacuum. But we invited Jeff Smith into the interview along with two of his officers, Jodie McCalla, project manager for Ohio Valley's research and technical applications department, and Bryna Butler, assistant vice-president and director of e-services and corporate communications.

King has worked with some of the largest banks in the U.S. and the world, but he doesn't think community banks need to concede the field.

"The big banks actually have the biggest challenges ahead because they are very large and unwieldy, and trying to change will be difficult.

The rest of this article is only available to active members of Questia

Sign up now for a free, 1-day trial and receive full access to:

  • Questia's entire collection
  • Automatic bibliography creation
  • More helpful research tools like notes, citations, and highlights
  • Ad-free environment

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited article

Keep Your Bank Relevant: Rapid Changes in How Customers Bank Threaten Traditional Banking. It Doesn't Have to Be That Way, Say Three Community Bankers and Brett King, Author of "BANK 2.0"
Settings

Settings

Typeface
Text size Smaller Larger
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Full screen

matching results for page

Cited passage

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited passage

Welcome to the new Questia Reader

The Questia Reader has been updated to provide you with an even better online reading experience.  It is now 100% Responsive, which means you can read our books and articles on any sized device you wish.  All of your favorite tools like notes, highlights, and citations are still here, but the way you select text has been updated to be easier to use, especially on touchscreen devices.  Here's how:

1. Click or tap the first word you want to select.
2. Click or tap the last word you want to select.

OK, got it!

Thanks for trying Questia!

Please continue trying out our research tools, but please note, full functionality is available only to our active members.

Your work will be lost once you leave this Web page.

For full access in an ad-free environment, sign up now for a FREE, 1-day trial.

Already a member? Log in now.