As community banks struggle in this era of commodity products, one way they have found to differentiate themselves from larger competitors is by emphasizing responsiveness to customer needs.
To find out how some entrepreneurial chief executive officers are using technology to achieve this, I spoke with several about their current initiatives.
Vince Berta, acting CEO of Trans Financial Bank, a $1.3 billion-asset bank in Bowling Green, Ky., is aware of the importance of technology, but he wisely cautions that banks today must make sure "that they apply new technology on top of new processes."
The bank is focusing two-thirds of its incremental technology budget on areas which impact customers. These include telecommunications, a data warehouse, automated teller machine improvements, and a call center.
It is the data warehouse that Mr. Berta sees as fundamental to his concept of customer relationship management and a way of getting the right information into the right person's hands.
Bob Gallagher, vice chairman of Chicago-based Associated Bank Corp., is using technology to "be one bank on the back end and look different on the front."
By standardizing and centralizing back-office operations, this $1.1 billion bank can achieve the operating efficiencies it needs to be competitive while serving its customer base better and more personally.
Keenly aware that some markets are better than others, Mr. Gallagher evaluates each of his markets separately and avoids trying to make one size fit all. "By remaining sensitive to the local issues of each of our communities, we differentiate ourselves from the big banks."
Alan Levan, chairman and president of BankAtlantic in Fort Lauderdale, feels that his a $2.6 billion savings bank has attained the size, systems, and back-office expertise to compete effectively with the large institutions that tend to dominate Florida. Mr. Levan is dedicated to making BankAtlantic's presence felt throughout the state and has been able to do this through the intelligent application of technology.
In addition to a large network of ATMs in Sam's Clubs, Wal-Mart stores, and on cruise ships, the bank has opened 11 full-service branches in Wal- Mart Superstores, expanding its presence statewide.
Unlike other CEOs I spoke with, Mr. Levan does not think the Internet or home banking is overhyped. He sees a segment of the population that "never wants to set foot in a bank again"-the segment he describes as wanting "all the electronic options." To capture this segment, he is willing to make PC banking available to both business and retail customers.
Trans Financial's Mr. Berta, on the other hand, feels the Internet and home banking are overhyped. His bank doesn't want to push its customers toward technology, but to attract them to it "at a pace they'll accept and pay for."
Mr. Gallagher agrees the Internet is not high on the list of customer demands right now. And although they have a home page, they haven't promoted it or gotten many inquiries about it yet.
Cautiously alert to the possibilities, Mr. Gallagher says, the bank will "jump in at the right time."
While BankAtlantic's Mr. Levan sees "more electronics and less branches" in the future, he acknowledges that this applies only to a certain segment of the population.
The CEOs agreed that technology alone will never carry a company to greatness. But a lack of appropriate technology will surely contribute to its demise. All also agreed that the only sensible way to proceed in this time of rapid change is with a technology plan to guide them.
Banks that survive in the stormy seas of consolidation will do so by differentiating themselves through delivery, and will ensure their delivery through planning.
