Richard Elko excitedly describes the reinvention of consumer banking at Conestoga Bank, a path toward branches that more closely resemble small, virtualized pieces of the central office than separate outposts.
"We wake up in the morning and say 'what should a bank look like in today's world?' If Google or Apple had a bank, what would it look like?," says the CEO of the $622 million Chester Springs, Pa.-based Conestoga.
For Conestoga, that answer is Bankwerx, a streamlined video and remote access-heavy model for in-store banking that the bank hopes will allow full service, advice and transaction capabilities at vastly reduced size and in-store staff. The bank is testing Bankwerx at a branch near Rittenhouse Square, a busy part of central Philadelphia with lots of pedestrian traffic, and hopes to expand the model to new branches in the Philadelphia area.
Banks are under considerable pressure to reign in real estate and staffing costs for branches, as well as figure out how to make stores resonate with consumers who are becoming increasingly comfortable using remote access channels like Web banking and mobile. The result has been changes in branch design and the use of video connectivity to extend the reach of bank experts to multiple branches and remote locations. Conestoga is trying to advance the model by combining branch design, video and file transfer techniques to allow more robust video-enabled transactions, including the commencement of new credit and savings products; in effect adding video sales to earlier video teller services.
"Our thought process is that first and foremost, people aren't using teller transactions as much as they used to. Most banks have had to skinny up as best they can, but you can't skinny up hours or split people in half," Elko says.
But perhaps people can be split. The bank's plan is to expand its branch network without hiring new tellers, and having only a couple of people on site, mostly to help with using the technology. To accommodate the lower staffing levels, it's using new video banking from uGenius called SmartOFFICE that is designed to increase the amount of functions that can be executed remotely.
"It's more than an ATM with a video. You can walk into an office and access the back office people, or talk to an SBA lender or a mortgage specialist. We'll be able to deliver these services to people remotely at virtually no cost," Elko says.
Jed Taylor, president of uGenius, says SmartOFFICE uses remote identity photo capture, using a webcam to capture snapshots from a remote PC, to authenticate consumers. Along with remote digital signatures (technology that allows PDF signing and encrypting), consumers can perform more advanced transactions, such as opening accounts, applying for loans, and reviewing applications in progress. Elko says the bank is taking advantage of broader bandwidth to improve video quality — he says this mitigates the "war correspondent" effect by eliminating the odd delays that accompany video reports from locales like Iraq and Afghanistan and allows for real-time execution via videoconferencing. Conestoga, which currently has about a half-dozen branches, says these tech advances combine to produce all of the services that a traditional bank branch would produce, and should reduce the size of future branches from an average of 3,500 square feet to about 1,500 square feet. The Central City Philadelphia branch is about 1,900 square feet, and opened in mid June.
The videos will link to professional staff in Feasterville, Pa., which is about 40 miles from Philadelphia. As the number of branches using the Bankwerx model increases, Elko says staffing and scheduling will be determined based on modeling similar to call centers. "We want to provide a smaller, more intimate place to talk to a professional banker about a new loan or a new product," Elko says.