Nuvo Bank has just one branch in downtown Springfield, but the $110-million institution, which celebrates its fifth birthday this spring, has turned a profit in the past two years and managed to scoop up commercial customers from as far away as Long Island.
The bank offers remote deposit capture to its commercial customers, and CEO M. Dale Janes said that service has made the little bank appealing to the small to mid-sized businesses it serves.
“Most of our borrowers use remote deposit capture. For the most part, they love it. It’s cheaper than sending somebody to the bank every day; it’s efficient. They love the software,” he said. “That’s the biggest technologically-based product that we use. It’s much more convenient. Every one of my customers with remote deposit capture is a branch. That’s how we can compete with banks with big branch networks.”
Remote deposit was unheard of as recently as 10 years ago, but the proliferation of a wide variety of technological products for banks and the vendors eager to sell them has made it easier than ever for smaller community banks to compete with their multi-billion dollar peers.
Robert Bessel, spokesman for COCC, an Avon, Conn.-based banking technology services firm, said that technology has effectively become a great equalizer for community banks in recent years.
“These banks are picking up an incredible amount of deposits because they can do this. They’re adding things like the ability to process ACH and wire requests,” Bessel said. “Five, six, seven years ago, you just couldn’t do that in a small bank. Now you have technology that handles all that.”
But it’s not just picking up customers from far away. Technology is a crime stopper, too.
Banking’s McGruff
Holyoke-based PeoplesBank introduced a fraud prevention measure for its commercial customers called Positive Pay, Jacqueline Charron, senior vice president of operations, said.
“When a customer issues checks, they upload an issue file with the dollar amount, date and check number. As checks are cleared against the account, that file is compared against those checks, so if a customer has not issued one of those checks, it sends up a red flag,” she said. “That is a great stopping point, so customers aren’t faced with people trying to create fraudulent checks on their account. We can stop it right at the teller line.”
PeoplesBank jumped on the mobile banking bandwagon quite a while ago, Charron said. Her bank now offers mobile banking applications for the iPhone, Blackberry, Android, and iPad, plus browser-based mobile banking for those customers who don’t want to download an app.
Mansfield Bank Senior Vice President Shanika Rogowski said her bank will introduce “Pop Money” to its customers this spring.
“Say you want to send $50 to your sister in Connecticut. It doesn’t matter who she banks with. It’s an app on your phone, you go into it, it takes your contacts from your phone, and then they receive a message. If it’s the first time they’ve ever used pop money, then they have to put in four basic pieces of information, but once they’ve done that, then they’re good to go,” Rogowski explained. “It avoids mail time, it avoids costly fees. It’s just a quick and easy way to use mobile technology.”
Still, other banks, like Cambridge Savings, have taken to social media to promote their presence in the digital world.
Cambridge Bank’s Digital Marketing Manager Jessica Bourne said her bank has used Facebook and Twitter not just for publicity purposes, but to help customers on the channels where they feel comfortable.
“It could be something really simple. Say someone downloaded our mobile deposit feature, and they can’t figure out quite how it works,” she proposed. “For something like that, I can answer the question really quickly. If it’s something a bit more complicated, we can pretty much drop whatever we’re doing and get the answer. Whether they need help with web banking or they have a question about an ATM, there’s someone who can answer it.”
Of course, getting hip to the times can be daunting for a small bank, and many smaller institutions prefer not to be early adopters simply because of the cost and staff investment associated with adopting mobile banking or remote deposit capture.
And Bourne says that social media can present a compliance challenge for smaller banks: “A bank is very different than a restaurant or clothing store that can use social media very freely. Banks have to be mindful of the privacy compliance. That can be very intimidating for smaller banks, as well.”
Ultimately, some banks are deciding the rewards outweigh the risks. They can purchase a suite of technological offerings and presto! To a prospective customer, their products can look just like the big bank’s, but with a personal, local touch.
“The technology is bringing these smaller banks up to part with these much larger institutions. They have the capabilities, but they also have that local, high touch aspect to them, where they can provide the service that these businesses crave,” Bessel said. “All of this stuff 10 years ago just didn’t exist.”
Email: lalix@thewarrengroup.com
