The safe deposit vault is not the most glamorous and exciting place in the bank. It is usually windowless, in the basement, and receives executive attention only when something goes wrong.

Of course, those who delve into vault operations often come up with far more human and interesting stories.

* There was the vault of the Manufacturers Hanover Bank at Coney Island in New York, which had a tremendous demand for safe- deposit boxes. People would pay $6 a year, come in every warm summer day and change for the beach in the private rooms. (The bank people had the job of cleaning the sand every evening when the boxholders had changed back and left.)

* One bank in New York's diamond district had as customers largely diamond dealers who would take the diamonds out in the morning, replacing them with the newspaper they had been reading on the bus in. In the evening, they would return the diamonds to the vault, take the paper, and finish reading it on the way home. A burglar robbing the bank vaults at night would become rich, but if he worked in the daytime, all he would get would be a hundred newspapers.

* One ingenious Manhattan customer used to come to the bank every Friday afternoon with his secretary and take their large corporate box to a private room for several hours. He admitted to a banker friend of mine who ran that branch that all he kept in the box was a blanket.

* But my favorite vault story was told to me by a regulator after the passage of the law requiring nonmember banks to start reporting their vault cash and other reserves to the regulators. Under the item "Vault Cash," one bank filled in the amount "zero."

But astute bankers at institutions of all sizes recognize that the vault is not just a source of anecdotes and customer convenience, but can be profit center and a valued marketing tool as well.

It has always seemed ironic that people can get a box in the bank vault, located in the center of town and thus in the highest real estate around, for about $30, while they pay $200 for a locker to put their sneakers in at the country club -- several miles away. With the demand for bank vault boxes so large, why not charge what the traffic will bear?

But far more important: Who comes to your vault? It is your highest-net-worth customers -- those who have wealth to protect, coupons to clip, securities to put in and take out. Aren't these the very people who are the bank's best targets for annuities, mutual funds, and all the other new investment products the banks are trying to sell?

Why don't we have trained salespeople in the vault area available to talk to the bank's most probable investment buyers, instead of just nice people who are competent in checking signatures, assigning private rooms, and keeping track of who has paid his annual fee?

Of course, if a bank does try to gain the benefits of using its vault customers as the best prospects for investment products, this means that it becomes more difficult if the banks wants to close a branch and consolidate its brick and mortar investments. For community banks, this is not as much of a problem as it might be for large branch networks. But it does mean that if a community bank wants to open a branch, it must think twice about whether it wants to inaugurate vault service there. For it will be tougher to close that branch when it does offer vaults than when it doesn't if it turns out that the branch is not profitable and that the expansion was a mistake.

But as banks compete against insurance companies, stockbrokers, and others for the public's financial business, one great advantage the bank had is its presence in the community. A staffed branch sure beats the pants off an 800 number in providing financial service. And if this human presence in the community is fully valued by the banker in today's competitive environment, then he misses a good bet if he does not take advantage of all the benefits that his safe deposit box facility can provide.

Reminder

December's contest is going to be broader than the previous two. Again, the winner (or winners) will become presidents of our bank for a day.

The issue:

With all the pressure on the community bank to make contributions to schools, churches, non-profit groups, and charities, how do you decide whom to support and how much to give each, if any?

Answers can be mailed to the attached address or faxed to me at 908-273-7309.

And to all of you, thanks for making this contest feature of the Weekly Adviser informative and, I hope, fun, too.

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