Dangling convenience and cost savings before deposit holders, more financial institutions are making investments in digital services through mobile phones and other portable devices.
Bank customers can now check their account balance, find the nearest ATM or transfer funds with a pocket-sized device anywhere there’s cellular service, functions that a decade ago required a desktop computer or a phone call or a visit to a bank branch.
Adding such services is not an easy decision or inexpensive transition for banks to make, though.
“We looked at mobile banking years and years ago and no one had an appetite for it. Banks have had this in the background but it really was not a hot commodity. But it will be in 2010,” said Jeff Stone, president of KeyBank.
Services are going beyond just mobile banking and having access to balances via text-messaging features. Now banks are offering the ability to capture deposits remotely, enabling businesses to scan in checks instead of going to the bank. “That’s catching on more and more. Every month we’re seeing more and more of that,” Stone said.
The Cleveland-based bank chain, with a regional headquarters and 51 branches in the Capital Region employing 1,300 people, is relying on consumers taking hold of such technology as part of a plan to expand its customer base and market penetration.
“The functionality continues to change and get better,” Stone said. “We’re constantly upgrading our online systems and technology in our branches. We upgraded our teller systems in 2009 with check imaging and lots of things that are much quicker for customers.”
Michael Castellana, president and CEO of SEFCU, said consumers have more access to information than ever before because of the Internet. Whether they want to check their balance from their BlackBerry or pay a bill at 2 a.m., online banking, once a novelty, is now an expectation from people wanting to have 24/7 access to their money. Castellana said.
“Certainly text messaging is entering the financial services arena. You’ll see that one from us. We’re completely redoing the entire phase of our entire web space,” Castellana said. “Online banking programs are one of the highly used and most active delivery systems.”
SEFCU continues to enhance its Web site and the credit union is now using it to sign up new account holders and provide more information for services.
“A significant percentage of our lending comes from the Web and there is very little human interaction,” he said. “It all falls under the heading of self-service. People want access to their funds and their personal finances — how they want, when they want.”
Not only do customers have access to deposits, loans and transactions, now they are able to incorporate that into personal financial management software so people can track their spending in real time, Castellana said.
The new technologies also help operations.
“To survive, we all have to be more efficient, and one of the ways to enhance efficiency is through available technology. The adoption curve for many of these technologies continues to accelerate,” he said.
One of the major purveyors of online and mobile banking is Bank of America, which has 37 percent of all online banking customers in the United States and more than 3 million customers who actively use mobile banking, according to spokesman T.J. Crawford. Bank of America also offers up to 41 different online alerts that can be sent directly to a deposit holder’s e-mail address, everything from overdraft alerts to daily updates on account balances. More than 278 million of these alerts were delivered in 2008, up from 165 million in 2007.
The company has 282,000 employees worldwide. Local employment figures were not available, but in its greater Albany market, there are 34 banking centers and 39 ATMs.
Trustco Bank Vice President and Treasurer Kevin Timmons said caution is in order with investments in newer banking technologies because they do not always pay off.
“We have historically not rushed to be an early adapter,” Timmons said, because “they tend to spend more money on the front end.
“A certain number of the new technologies turn out not to be winners,” Timmons said. “Ten years ago there was the move toward desktop smart phones that could process banking. They never panned out. People who invested a lot of time and money trying to deliver those actual phones or products over those phones, never got any real return on their investment.”
Timmons said as customers are truly adopting newer technologies, Trustco would recognize the demand and follow suit.
“We weren’t one of the first banks to have electronic banking, but we certainly do now,” Timmons said.
Sunmark Federal Credit Union recently relaunched its Web site after a redesign with interactive features that incorporate social media sites like Facebook and Twitter. FinanceWorks, customized personal finance software, was made available to customers this month. The credit union also upgraded its bill pay and telephone banking services, but mobile banking remains the next frontier.
“We are not into mobile yet. We’re working with our vendor. We are definitely moving in that direction. Everything is going mobile. It is just not an easy, inexpensive switch,” President and CEO Bruce M. Beaudette said. “Some things we like to be the leading edge on and other things we like to wait on until the cost comes down.”
Ballston Spa National Bank is another institution on the fence when it comes to mobile banking.
“The point in time you jump in is fairly critical based on the enhancements taking place,” said Chris Dowd, president and CEO. “We’ve been looking at mobile banking for the past 12 months and we’ll continue to look at it.”
Three years ago, BSNB enhanced its Web site and online banking capability. Dowd sees mobile banking as an inevitable customer amenity, at some point.
Considering how the demographic of banking customers continues to change, he said the need to stay on top of the trend is critical.
“We’re going to continue to look at opportunities to enhance our products and services and our delivery systems,” Dowd said. “Understanding that what makes us successful is access to our staff. I think all the technological improvements are wonderful, but I believe you still need good people, making good decisions.”
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