Getting Ready For The Bank Of Tomorrow
Retail Delivery '96 Shows Signs Of The Future
As proof that bankers are not facing the future with their heads in the sand, over 7,000 of them recently attended Bank Administration Institute's (BAI) Retail Delivery Financial Services Technology Conference in Dallas.
The bankers in attendance kept the 350 exhibitors busy during the long days the booths were manned (8:00 a.m. to 7:30 p.m. each day) asking questions, watching demonstrations, picking up material, networking, and getting leads on "who-can-do-the-job."
The emphasis on most of the questions was not "we're studying all avenues trying to decide" as has been noted in the past. According to exhibitors interviewed, bankers were more interested in looking to hire someone to implement and execute systems and access capabilities.
BAI released two studies at the conference. One, on the small business market, warned that too many bankers are unaware how much of that business is disappearing to other sources. The other, titled "Marketing Excellence", revealed that except for a dozen or so large sophisticated institutions, banks have barely begun the serious task of gathering databases in order to increase profitability and retain their best customers.
Many discussions were, of course, about the Internet. Frank Feather, a Canadian banking expert, was quoted as saying that the Internet "...is the biggest thing ever in human history. It is not a technology, but a socio-economic system changing the way we live."
He decried the fact that many bankers still regard the Internet as a passing fancy, with many of them agreeing with Citicorp chairman John Reed's prediction that full electronic banking would not be mainstream for 50 to 75 years. Mr. Feather disagreed heartily with that statement, making his own prediction that within 25 years, there will be no full-service branches or tellers in North America.As if in coordination with Frank Feather's comments, mbanx, a new bank started as a subsidiary of the Bank of Montreal in Canada, recently announced it would open no physical branches whatsoever. It will rely completely on other banks' ATMs, home PCs, and operators answering an 800 number to provide all customer services.
In Canada, nearly half of all banking transactions involve no human interaction. Canadian banks now want to lure their customers to interact only with machines by offering additional products and services at ATMs. The new ATMs, which mbanx will also introduce into the United States and Mexico, may include the new breed of ATM that can sell mutual funds, sell insurance, process home-loan applications, provide financial projections on customers' receipts, recharge smart cards, dispense concert tickets, and also dispense cans of soda pop!
The top 100 banks in the United States, according to a 1996 Ernst and Young Survey, will shortly begin to reduce the number of full service branches to cut costs. These institutions expect personal computer banking to increase in usage by 500 percent.
The bankers attending the technology show in Dallas are proof that many in the banking industry are aware of this fact, and are preparing for it.
Copyright © 1997 Bankers' Hotline. Originally appeared in Bankers' Hotline, Vol. 7, No. 2, 1/97
First published on 01/01/1997