Social Media, Risk Weigh Heavily on ICBA Conference Attendees

Article excerpt

Byline: Jackie Stewart

Community banks are proceeding with caution as they confront some of the industry's biggest challenges: expanded use of social media and mobile banking and changing regulation.

Executives who attended this year's Independent Community Bankers of America's national conference say they realize social media is here to stay and that they must adapt to reach more customers. Several attendees said they were heading back to their banks intent to bolstering their use of nontraditional outlets.

Other bankers expressed an interest in offering new products to offset soft loan demand. Most executives and directors left with lingering concerns about new regulations that were tempered somewhat by hope that regulators were listening to them.

"Social media is the wave of the future," Norman Wagstaff Jr., a director at Citizens Community Bank in South Hill, Va., said. "Teenagers almost only communicate through social media. They don't even make calls anymore."

The $163 million-asset Citizens, which launched mobile banking earlier this month, is starting to "tackle all aspects of social media that it can," said Wagstaff, who has been a director since 2007.

Executives at Security Bank of the Ozarks in Eminence, Mo., are looking at mobile banking as a way to generate fees since the "old way to make money is gone," said Brad Williams, the $47 million-asset bank's chairman and president. He said Security Bank once thrived on overdraft fees and providing credit life insurance but new regulation has reduced their profitability.

Security Bank could start requiring minimum account balances and cross sell more services to clients, though management has not made any decisions on those ideas, Williams said.

After attending the ICBA conference, Mary Yates, a director at First American Bank, realized that the Artesia, N.M., bank had could be doing more with mobile banking and social media. The $838 million-asset bank texts clients when an account statement is ready, and Yates said she thinks First American will explore ways to add notifications about possible account fraud.

"Mobile banking and social media won't go away," Yates said. "You have to protect the privacy of your customers. We're embracing this as a new way to market the bank but we are also cautious."

An abundance of caution was evident with Peter Bochnovich, chief lending officer at Dime Bank in Honesdale, Pa., who was on a "fact-finding mission" while visiting with the technology vendors. Bochnovich said he was searching for information on services for social media, which is new to Dime, and back office products for lending. …