Casey, Diane, Independent Banker
High-tech products and services are critical to success, bankers agree
As they have for several years, a large majority of community banks (93 percent) cite "employing technology" as the most important factor in their future success. Grant Thornton LLP's fifth annual survey of community bank executives, "The New Age of Community Banking," finds that community banks seek to link their highly personalized service with technologically sophisticated products and services.
Using hardware and software effectively allows community banks to compete head to head with the largest banks and financial services players without jeopardizing the "high touch" service for which community banks are known.
The survey's findings, based on responses from 600 community bank and thrift executives, reveal a consistent theme of increasing and improving technology usage. Half of all community banks (51 percent) say "playing an active role in the new world of electronic commerce" remains important to their success. Community bankers serving institutions of all sizes share this view.
To remain economically central to the communities they serve, community bankers indicate that they intend to introduce a number of high-tech services within the next five years. Again, technologybased offerings top the list.
Most community bankers say they plan within five years to offer debit cards (96 percent), telephone banking (89 percent) and home banking via personal computer (79 percent). For this survey, "telephone banking" was defined as automated voice response. Among community banks today, 58 percent are providing debit cards, 51 percent telephone banking options and 9 percent PC home banking. (See Table 1).
Almost one-third of all community banks (30 percent) have the technology in place to translate the electronic data interchange that accompanies electronic payments.
EDI capability will become essential by 1999, when the federal government converts to electronic payments.
One great advantage of the Internet is that it serves as a "great equalizer" by enabling smaller competitors to compete on the same level as their larger rivals. A small community bank's Web site can be as attractive and effective as a larger bank's.
More than half of all community banks (55 percent) expect to have a Web site by year's end. While few community bank Web sites today carry electronic transactions (2 percent), that is changing; another 13 percent say their sites will enable customers to conduct transactions in 1998.
Nevertheless PC-based home banking appears poised to remain in the community banking industry's future. While possibly overly optimistic, more than three-quarters of all community bankers (79 percent) anticipate offering home banking via personal computers within five years. With the price of such delivery channels falling, there is no reason that more community banks should not consider providing this service. …