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Branchless banking changes financial services landscape for local businesses

The role of the traditional bank branch has diminished. Ubiquitous broadband and decreased check usage have sealed the fate of the brick-and-mortar-only operation.

Modern technology, new online protocols and customer preference have set the stage for a revised banking landscape -- one where the customer no longer needs to step foot in a bank. In a role reversal, savvy executives are taking advantage of community banks' emphasis on personalized service and a "we'll come to you" mentality.

Bringing banking in-house

While daily branch traffic will likely decline over time, face-to-face communications and high-service orientation continue as the centerpieces of a productive banking relationship.

Sean McDermott, president of Advanced Electronics Solutions2 (AES2), a supplier of integrated electronic systems based in El Cajon, made sure he selected a banking partner who would sit down with his team in person to understand the company and the business. Looking to diversify outside of the residential housing market, AES2, which specializes in home wiring systems, chose a financial services provider who could help to make that happen.

"Because of our close relationship, Security Business Bank was able to develop a customized set of banking products and services that supported our business goals," said McDermott. "The bank created an in-house banking center at our headquarters in El Cajon. This transition helped to integrate key banking services directly into our day-to-day operations, giving us a more comprehensive and current view of our financial portfolio."

Optically transmitting deposits

Complementing their in-house capabilities, Tom Wardell, CFO of AES2, led the company's adoption of a transformative banking tool called remote deposit processing.

"Security Business Bank made it very easy for us to test and employ this new check processing system," he said. "They not only brought the technology out to us but managed the onsite equipment assessment, installation, implementation and training. We didn't have to call an 800 number like at other banks. The customer support was not only excellent; it was right here."

Remote deposit processing is a Web-based check image, capture, storage and processing system. An Internet-enabled PC and a check scanner are the only tools needed to employ the service, which optically transmits deposits by a secure encrypted Internet connection and ensures that funds are immediately deposited into a customer's bank account.

"With remote deposit processing, we don't have to worry about what time of day a check arrives to make our daily deposit. We're no longer at the mercy of the U.S. mail," Wardell said. "We've eliminated the need for costly couriers to carry our checks to a bank branch. And, we have improved the way in which we manage our cash.

"All in all, remote deposit processing has changed the way that we do business."

Names and numbers

Wardell counsels up-and-coming entrepreneurs to carefully evaluate the team they'll be working with before selecting a bank.

"You don't want to be a bunch of numbers that a bank throws into a formula. Banks should make decisions based on who you are and what your plans are, not just on the numbers," he continued. "With many banks it's paperwork instead of a relationship. Security Business Bank understands where our business is going and can help us get there."

As advanced technology allows banks of contrasting sizes to compete for customers, personalized service is the mainstay of a company's banking relationship. Branchless banking, product upgrades and first-rate customer service have turned banking relationships upside down. Businesses have developed new criteria by which to judge their bank. As a result, small- and medium-sized businesses are enjoying greater efficiencies, a partnership model and enhanced prospects for growth.


Dennis is a senior consultant with OutSmart.

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