INSIGHT ON: Banking & Credit Unions – Banking bytes

Posted on Jul 1, 2014 :: Banking & Credit Union Trends , Insight On
Sean P. Johnson
Posted by , Insight on Business Staff Writer

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Casee Meach could easily be the poster child for how banking has changed in the age of online apps.

She has a hard time remembering the last time she set foot in a bank branch for her personal banking, and has only a vague recollection of a visit on behalf of the small business she operates. A long pause gives away that it’s been a while since her banker has seen her in person.

“I’m pretty sure it was a few months ago to get some change for the register,” says Meach, the sales and marketing director for Branching Out & Company in Appleton. “I do it all online. I’m all about ease.”

Meach may be a bit of an early adapter – she’s done all of her personal banking online for years and upgraded her business banking about two years ago – but she is indicative of the client that banks and credit unions will be competing for in the future. Meach says she likes the control the online and mobile tools from U.S. Bank gives her over her money and business operations.

While customers were often reluctant to change banks in the past, recent industry studies suggest that online banking and mobile apps could put more than 35 percent of the consumer marketplace in play, particularly as digital natives become a greater part of the demographic mix.

The competition to attract and retain those consumers has spawned an explosion in online tools and mobile apps that empower users to better control their money.

“We are clearly hearing those expectations that digital must be part of the equation,” says Brent R. Tischler, executive vice president and head of payments and direct channels at Associated Bank. “We are seeing that those services matter when it comes to acquiring and retaining customers.”

To keep pace with demand, Associated revamped its website in 2013, as well as added several upgrades to its mobile banking app such as peer-to-peer payments and creating an iPad version. This past year, the bank introduced snap deposit, which allows users to take a picture of a check and have it deposited in their account.

“It’s been a huge success from a customer standpoint,” Tischler says. “We have more deposits with that than our ATM fleet.”

FNB Fox Valley debuted a new mobile app in 2013, also complementing a recent upgrade to its website and online banking services. FNB mobile services also include a peer-to-peer service, POP MONEY, and mobile deposits.

For community banks such as FNB, mobile and online banking allow them to compete in the same arena as larger, national banks, says Kerri Bedor, vice president and chief marketing officer for FNB.

“Technology is leveling the playing field in the industry,” Bedor says. “We are able to offer top-notch mobile and online banking services just like the larger institutions.”

Local credit unions also have experienced escalating demand for online and mobile apps that allow customers greater control over their money, says Amanda Secor, senior vice president of marketing for Community First Credit Union.

“They give people a really nice toolbox of options,” Secor says of the app the credit union released in 2013. “When people are out and about, or it’s late at night, they can do all of the things they need to do on the fly.”

While consumer demand has generated the greatest buzz, many of these technologies are being adopted by the business community as well. Meach, for example, uses online tools that allow her to direct payments to employees and take care of almost all of her business management needs.

Associated also has rolled out new tools on the commercial side and is seeing growing demand from the micro-segment, businesses under $100,000 a year in revenue.

“They look and feel a lot like personal banking customers, and can easily use those tools,” Tischler says. “But we are also planning some more robust tools that will include cash and invoice management for 2015.”

Bedor says FNB has introduced a service called SPOT PAY, which enables a small business to take payments directly on a smart phone or tablet. FNB also is working to stay ahead of the growing digital wallet trend.

The growing popularity of online and mobile banking has some industry watchers predicting the demise of the bank branch. After all, if people are doing their banking online or with a smart phone, what use is the physical building?

Those who work in industry in this region aren’t so convinced the branch is an endangered species.

“ATMs did not lead to the end of the drive-up teller,” Secor says. “There are times when you want to meet face-to-face, like a mortgage. But for everyday access, people want it on the go.”

For Meach, the online tools are how she has always done business. She appreciates the flexibility – she and her controller can log in and manage finances when it’s convenient – that enables her to spend more time running her business.

“It just makes things so much easier,” she says.