When it comes to customer service, most community bankers believe that the personal touch goes a lot further than simply automating branch workers' jobs.

But now they are finding that some well-placed technology can actually improve that person-to-person approach.

The proliferation of inexpensive personal-computer hardware and sophisticated software has contributed significantly to employee productivity, freeing up branch workers to spend more time with clients.

PC technology "keeps us in compliance [with federal regulations] and it keeps us accurate," said Ann Lee Suttles, senior vice president of Oklahoma Bank, a $118 million-asset institution based in Oklahoma City.

Before it recently introduced PCs into its main office and single branch, said Ms. Suttles, Oklahoma Bank's customer service representatives used typewriters to detail information on new accounts - information that later had to be rekeyed into various computer systems.

Now, with personal computers accessible to all employees, customer information is keyed in only once; the customer then reviews the information for accuracy and receives all necessary regulatory disclosures within minutes of opening an account.

By working with PCs, the bank also benefits because it has access to all the basic information gathered during that initial account-opening session, streamlining subsequent dealings with customers.

The experiences of Oklahoma Bank closely resemble those of a growing number of smaller institutions, as illustrated by key findings of the American Banker/Ernst & Young 1993 Community Banking Technology Survey.

Only 6% of community banks today have no type of automation in the platform area, and all but 2% expect platform stations to be automated by 1996, according to the research, conducted by the Tower Group, a bank technology consulting firm based in Dover, Mass.

Most of the platform systems in place today at community banks rely on PC technology - 55% of those banks responding to the survey use PC-based automation in platform operations; 39% use "dumb" terminals connected to mainframe or minicomputer systems.

Teller automation is still less dependent on PC technology, the survey indicates - 60% of the community banks participating in the survey use dumb-terminal automation at teller stations, 29% use PC-based systems, and 11% have not automated their teller stations.

The survey covered a broad array of technology topics and elicited responses from 78 institutions, each with assets of less than $1 billion.

For many community banks, the move to automation is a response to competitive pressures. As larger banks begin moving into the traditional market strongholds of community banks, most are deploying technology that helps enhance the personal touch that community banks have become known for, said Greg Schmergel, vice president of the Tower Group.

Computer systems enable tellers to instantly access information on customers, for example, and to expedite routine transactions like the depositing of checks.

"As the big banks do that, it becomes more important for the community banks to make sure their technology keeps up with what is possible," said Mr. Schmergel.

"Once you've experienced the one-minute check deposit, you get really fed up with 10-minute transactions," he said.

More to the point, however, the 10-minute transaction is a situation no bank can endure and expect to remain profitable, particularly a community bank that lacks the financial backing of a large holding company structure.

"We have to serve our customers efficiently and bring profits to the bottom line," said Ms. Suttles of Oklahoma Bank. "We don't have a big brother or big sister upstream who can take care of us."

And the best way to achieve that goal, community bankers say, is through customer convenience.

Hannibal National Bank in Hannibal, Mo., is a case in point. The $85 million-asset institution has found itself serving an aging clientele. But it

is eager to expand its presence among younger consumers, who demand more convenience than their elders, said Jerry Trower, the bank's president.

"Loans and fee-based services are the keys to profitability, and as a rule, older people don't need loans or go for fee-based services," said Mr. Trower. "To get more customers, we had to add convenience" to the bank's service mix.

Toward that end, Mr. Trower said, Hannibal National, which always operated out of one location, has installed automated teller machines at two local convenience stores that enable customers to access their accounts remotely. And the bank is in the process of building its first branch office.

Strategies such as this are what will keep community banks in business, even as big banks continue spreading into markets that have been the traditional strongholds of smaller banks, said William T. Gregor. senior vice president and director of Gemini Consulting Inc., Cambridge, Mass.

"The biggest competitive advantage community banks have is that they can comfortably fit themselves into the specific community with its idiosyncracies and its social structure," said Mr. Gregor.

The objective is to design bank operations efficiently, and automation provides community bankers everywhere with the means for achieving that goal.

Bankers who have deployed automated systems in their branch operations report that they are able to expand business without adding staff.

"Automation will allow us to serve a lot more customers with the same number of people we have now," Ms. Suttles said.

With a staff of 57 working in four facilities, Oklahoma Bank as of June boasted $2.03 million in assets supported per employee, up from $1.99 million at yearend 1992, said Dewey Milby, executive vice president and chief financial officer.

"Ten to 20 years ago it was about $1 million in assets per employee," said Mr. Milby, "and I believe 10 years from now we're going to have to go to $3 million [in assets supported per employee]."

Over and above general efficiencies, an important facet of branch automation is the ability to improve cross-selling opportunities.

The software used in a typical platform or teller system, for example, can be programmed to alert branch employees that a customer they are working with has a certificate of deposit that is about to mature and to advise that customer on options available for reinvesting that money with the bank.

"You can't just open a checking account in a bank and make money any more," added Joe Petruzella, vice president of marketing at BancTec Financial Systems, a Dallas-based technology firm.

"The whole key is to have one customer with four accounts, rather than four customers with one account each," Mr. Petruzella said.

What is the bottom-line cost of all this added functionality? Depending on the size of a bank and the extent to which it is being automated, anywhere from a low of about $30,000 to a high of about $1 million. The payback period is typically 18 to 36 months, again depending on the specific circumstances.

The investment made by the Bank of Walnut Creek, Walnut Creek, Calif., is at the low end of the spectrum. According to Lee Wines, executive vice president, the $115 million-asset institution spent about $30,000 on new hardware and software to automate teller and platform functions at its headquarters and three branch sites in the late 1980s.

When we installed it, our payback was in improved efficiencies and reductions in errors," said Mr. Wines. "We felt there was a 24-month payback on it."

This year's survey shows that the growing requirements of community banks with regard to technology are in keeping with what John O'Malley, chief operating officer at Orlando-based branch systems supplier Systeme Corp., sees in the marketplace.

"A lot of it is driven off of what the bank perceives to be its strategic direction and the tools necessary to achieve its goals," said Mr. O'Malley.

And for community banks these are important perceptions.

"When you're dealing with community banks, all of these investments [in people and technology] are strategic," said Mr. Gregor, the consultant.

"With large banks, you can make a half dozen different investments, and if some don't work you can fall back on others. These investments are much more critical for community banks," he said.

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