Over the past 20 years, banks have reduced their largest noninterest expense - personnel - by about two-thirds, increasing assets per employee from $1 million to more than $3 million. But while personnel expense has been greatly reduced, other noninterest expenses, especially information services and general computer-related items, have grown.
The good news is that this increased investment in technology can be harnessed to reduce the cost of improving the performance of the new, leaner staff. One way to make technology pay off is by using computers to let employees take self-study courses on a computer.
Research has shown that using computers to train is 50% more effective than other training methods such as seminars or group sessions. These computer courses present material in a consistent manner and employees can learn at their own pace.
The courses deliver more information in less time than traditional methods, including video-based training.
In addition, computer-based training allows managers to easily track who was trained, when the training took place, and how well learners performed on exams. A bank can easily evaluate the effectiveness of its training investment.
Finally, because computer-based training is available virtually any time, learners can get the training when and where they need it - even at home via the Internet.
Many bankers now recognize the importance of efficient training. Richard Woods, compliance officer for Mooresville Savings Bank in Mooresville, N.C., describes his bank's training investment as a necessary part of competing in the banking industry.
"If we didn't train our people properly, we'd have a rough time with the examiners," Mr. Woods said. "It could end up costing us more in lost opportunities and rectifying errors than the cost of the training programs."
Mooresville Savings Bank switched from video-based training to computer- based training more than two years ago and has reaped many of the benefits, Mr. Woods said.
"Using computers to train works better with the logistics in a small bank," he said. "It's not time-consuming, and it's easy to use even if the person isn't very computer literate."