Magazine article American Banker

First Virginia Bank Uses Tech, Low Fees as Differentiators

Magazine article American Banker

First Virginia Bank Uses Tech, Low Fees as Differentiators

Article excerpt

Byline: Penny Crosman

First Virginia Bank was born six years ago, just before the U.S. financial crisis, and has grown quickly to $500 million in assets through a strategy based on accommodating technology and low fees.

"People say it was a horrible time to open a bank," says David Pijor, CEO. But in a way the timing was not bad. Just around the time the bank opened, there was significant collapse in real estate collateral values. "When you're a bank making new loans in a market and you're lending to discounted real estate, your values don't go down too much," Pijor says. "It was the best of times, it was the worst of times."

The bank focuses on the commercial sector; about 85-90% of its business comes from small and mid-size businesses in the area.

One technology that has been popular with these clients is remote check deposit. The bank gives its business customers free desktop scanners that take batches of up to 100 checks, so they can make deposits at their convenience; 50% of the bank's deposits arrive this way. If a scanner breaks, the bank sends over a replacement the same day.

Some competitors charge $49 to $99 a month for check scanner rental.

Along with the desktop check scanners, the bank also provides software that gives customers detailed cash flow reports, at little or no charge. "We want to make it very easy for our large depositors to deposit with us," Pijor says.

"We made a big investment early on in hardware, software and people to provide state-of-the art remote deposit capture and online cash management tools," Pijor says. "We use technology with little or low fees as a hook to create sticky relationships with our large business clients."

The popularity of its remote deposit capture means First Virginia has a higher percentage of DDA to total deposits than many of its peers, which reduces its cost of funds. "That means I'm a little more profitable when I do make loans," Pijor says.

That means less need to rely on fee income or the bank's securities portfolio, which hasn't been reaping high yields of late.

One recent tech initiative at the bank was a website redesign that went live in October. (A recent Accenture study found that what consumers most want their banks to invest in is a better website.) [] LM&O Advertising in Arlington helped create the new design.

The site makeover was designed to make it easier for customers to access information and log into their accounts.

"We used strong, powerful imagery with minimal text, it's sleek and intuitive, and I've gotten a lot of positive response from our peers in the community as well as our customers about how easy it is to use," Pijor says. Through adaptive design, content automatically configures to the device accessing it. …

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