Maybe you’re reading this column in B&T’s print edition. Good for you. Someone has to keep up the tradition of ink-smeared fingers and a lackadaisical interest in what’s going on. But for others, well – they can’t wait for that Sunday morning email announcing that the latest Financial Observer is online. That’s why it’s buried at the bottom – they’re forced to scroll past all the ads before they get to the good stuff.
The kingpins at Banker & Tradesman would like you to make up your mind. They’d like to offer either a printed newspaper or an online publication. It’s expensive doing both. But you won’t cooperate. Some of you like one or the other. But lots of you like both. You want to be able to read this column on your mobile phone, and then wave the paper around at the office, asking why your employees aren’t as smart as this fellow.
What you haven’t realized is that the CFO here has been stealthily cutting back pages of the paper. Sure, we still print a few, but pretty soon it’s going to look like a newsletter in your chiropractor’s office. More and more stuff has been going online.
Why, it’s just like running a bank.
Bankers hate having actual banks to run. They like the money that’s in the bank. They don’t like the money that goes out of the bank to pay for things like rent, resealing the parking lot and giant vacuum tubes at the drive-up.
That’s why Bank of America is slicing about 10 percent of its branches. And it’s why banks across the nation snipped away at their branches for the second year in a row, according to SNL Financial.
Banks are moving toward online account openings and service. Not only is every customer’s home a branch office, but they actually pay the bank a mortgage to be in it.
Online Demos
Last week, Andera, a Providence, R.I.-based online account company, said people who open accounts online tend to have long-term, profitable relationships with their bank or credit union. These folks tend be wealthier, smarter and in the 18 to 35 age demographic that marketers love.
So, Andera is miffed that more community bankers just don’t get it. Its 15 largest clients tripled their online account openings in the last two years. But while community bankers keep jabbering about doing the same, most haven’t done much about it.
“Such delay puts those institutions at a disadvantage, because consumers are rapidly becoming comfortable with conducting business of all types electronically rather than at brick-and-mortar locations,” Andera’s study concluded.
Meanwhile, Money magazine was busy naming the 10 best banks in the country. And one of the 10 is Ally Bank, which took top honors in a couple of categories, but doesn’t have any branches at all. So, one could say that one in 10 super-successful banks is branchless. Or it could be argued that nine in 10 are loaded with teller counters.
That’s the problem. Consumers don’t want to do all their banking online, or all at a branch. They want to be able to go in and see Millie when they’ve got a question about when the inheritance check from Uncle Frank is going to clear. But they want to be able to pay their overdue utility bill in the dead private of night.
“Ten years ago, the consultants said to us that we had to scrap our branches and go straight to the Internet,” Alfredo Sáenz, the chief executive of Santander, the big Spanish bank that owns Sovereign, told The Economist in May. “But I had heard those kinds of statements before with the credit cards and ATMs … I’m old enough to remember.”
Despite the slack of the last couple of years, bank branches in the U.S. have actually grown by 22 percent since 2000. The Internet’s grown, too. Consumers want it all: a physical presence and a cyber one. And it’s going to take a lot for community banks to give it to them.
Just don’t take any lessons from newspapers. We’re not doing as good a job as banks are.
Vincent Michael Valvo is CEO of Agility
Resources Group LLC. He can be reached at
vvalvo@agilityresourcesgroup.com.
