Community banks are increasingly turning to account onboarding technology to help them solve a growing problem — how to win new customers without opening physical branches.

A case in point is the $3.5 billion-asset Alpine Bank, which has used its 40 branches to spread across Colorado but is now turning to technology to help it find customers in harder-to-reach areas of the state.

“We’re on a digital transformation journey, and this project on digital account origination is part of that,” said Andrew Karow, the bank's chief digital officer.

Andrew Karow, chief digital officer, Alpine Bank
Andrew Karow
“Four years ago, we expanded our footprint to the front range of Colorado,” said Andrew Karow, chief digital officer of Alpine Bank. “We have fewer branch locations there and wanted to leverage technology to better serve customers.”


Alpine isn't alone. Surety Bank in DeLand, Fla., last year left its legacy core systems provider to go with cloud-based newcomer Nymbus, in part because the ability to introduce new products quickly could allow the bank to reach well beyond its three branches in central Florida. Surety plans to debut a digital account opening tool later this year as part of its plan to expand regionally — and perhaps even nationally.

“The idea of community has changed so much in a digital world, it’s not just about geography anymore,” said Ryan James, Surety's CEO.

The software sometimes comes with a hefty price tag, running into the millions of dollars even for small banks. But it gives institutions a chance to expand their customer base in an era when fewer people want to go to the branch.

Alpine is implementing a digital account opening service from Avoka, one of a small but growing number of technology providers selling software to help banks battle the wider issue of declining branch transactions. Teller transactions are down 34% since 1992, while staffing costs have jumped almost 148% in the same period, according to the latest FMSI Teller Line study.

“Four years ago, we expanded our footprint to the front range of Colorado,” Karow said. “We have fewer branch locations there and wanted to leverage technology to better serve customers.”

Though the bank does not have plans to expand its customer base outside of Colorado, Karow said it can use the technology to do so if it opts for that in the future.

Alpine’s move toward digital account opening is indicative of a greater appetite among community banks to give customers the option of digital account opening, said David Gaydon, general manager for North America at Avoka, which is also based in Colorado.

“Alpine is the poster child of a larger trend happening in the community bank and credit union space of institutions that have a real appetite for this,” Gaydon added. “Alpine’s expansion plan to serve all Colorado residents across the Western Slope and Front Range alike increases their footprint in the most efficient way possible.”

Alpine customers get a completely digital account-opening experience, including ID verification, funding and immediate establishment of the account. In addition, the service will support allowing customers to start an application at home and complete it in a branch if assistance is needed.

Karow said the new tools will help the bank serve these customers with the same “personalized touch” even though a branch may not be right down the street. He also hopes the service can make potential new customers realize they don’t have to sacrifice tech capabilities when banking with a community financial institution.

“The perception that community banks are lagging behind in technology is a bit misplaced, which might be due in part to our own lack of marketing,” he said. “But we aim to offer all the tech capabilities of a big bank with the high-touch service of a community bank.”

Surety, meanwhile, is exploring the idea of creating several different “affinity banks” that would run on the central bank platform, but they would be entirely digital in nature and might attract customers from around the country.

“So we could potentially have several banks under Surety Bank, with separately branded experiences in other regions where people may not know Surety Bank,” James said.

Robust digital account opening tools can enable the acquisition of new customers without having to open new branches in different regions, he said.

But even for Surety’s customers in proximity to its branches in central Florida, the ability to open new accounts digitally is great for the customer experience, James said.

“No one’s going to the bank anymore; no one wants to drive there to have to open an account,” he said. “Unless they really need cash, the only time people usually come into a branch is if they have a problem.”