Pillars of the Community
Online banking vs. brick and mortar banks.
Take a tour through the CBD and you will find that some of the oldest and grandest historic buildings in town were originally built as banks and banking institutions. This rings true not only for New Orleans, but most metropolitan areas across the United States. These brick and mortar shrines to commerce were constructed to provide banking services while also instilling confidence and security for banking clients and investors.
These days, however, those grand old buildings — as well as many sleek, newer bank construction projects — are taking on new life, slimming down to provide only essential services or being repurposed as apartment buildings, restaurants and hotels. In today’s world, online technology and smartphone apps have rapidly transformed the need for traditional face-to-face banking.
Yet, while these bold physical transformations continue, the real question many individual consumers and small business owners have is how person-to-person banking professionals and services will continue to be an integral part of the health of small businesses and communities.
Empty Buildings
“We often see people come in when they open an account and then not much more after that,” says Guy Williams, president and CEO of Gulf Coast Bank and Trust. “We are seeing a reduction in the amount of bank branches. You don’t need the same branch numbers per customer as before. Where you might have needed one branch for every 2,000 customers, now you need one branch for every 3,000 customers.”
While many branches are shrinking in size, some are closing altogether. According to Williams, this poses new problems for building owners.
“Another unfortunate problem is what will happen with all of those bank locations,” he said. “For example, many FNBC locations are located near or next to a Whitney branch. What will happen to all of those closed branches? The landlord will have to find another tenant or use, such as a restaurant, for those locations simply because there is not as much demand.”
For customers, convenience is key, and while having bank branches nearby is important, having access to banking at your fingertips has become increasingly a way of life for everyday transactions.
According to a Federal Reserve Board 2016 survey of mobile financial services, 87 percent of the U.S. adult population has an internet-enabled mobile phone, and with that number, the adoption of mobile banking continues to grow.
Mobile banking has risen each year, since the Federal Reserve Board began surveying in 2011, to the current rate of 43 percent of all mobile phone owners with a bank account stating they had completed a mobile transaction in the previous 12 months.
Chris Ferris, executive vice president and chief retail and operations officer of Fidelity Bank, notes the advantages of online banking are increasing, providing a more immediate and current snapshot of a customer’s banking profile.
“Online banking offers a secure 24/7 platform that allows a client to bank on their time,” he says. “The addition of mobility means a client can check their balance before a purchase, thus avoiding errors and even pay a friend back immediately for lunch. Using a bill pay service saves time, money and is good for the environment. Most bill pay providers even offer a ‘pay today’ feature, which allows many clients to better manage their funds.”
Ferris says he recommends using a bank’s bill pay system rather than having the funds drafted from an account. “When you use your bank’s system, you are still in control of the payments and can direct when they are paid,” he says, “and you are also able to maintain all your payment records in one spot.”
While online banking can improve immediate access to account information, Ferris advises consumers remain cautious with their finances, and to employ bank resources to their fullest.
“Because online banking is readily accessible, sometimes people become overly confident and do not review their accounts on a regular basis,” he says. “It’s important to regularly log in and monitor your activity. Also, the addition of chat models via online banking can help guide the client through areas where they may stumble, but for a more complicated and sophisticated transaction a visit to our Fidelity Bank branch — where the client can discuss their needs with a trusted expert face to face — is recommended.”
When Online Isn’t Enough
While online banking continues to improve and grow, the need for a personal relationship, face-to-face, remains critical for many consumers, especially small business owners or those with unique banking issues. For those customers, experienced bankers, like John Zollinger, senior vice president and New Orleans market president of Home Bank, suggest coming in to a brick and mortar branch.
“It’s very important to have a relationship with your bank,” he advises. “Small business and niche business will have expertise in whatever their business is. They then rely on a circle of services to provide them with what else they need to do business. Our bankers bring all of their years of experience to the benefit of the small business owner.”
Zollinger notes that the needs of small business owners change, and often quickly, requiring a banking professional to adapt.
“We have the time and energy to care,” he says. “Big banks get hampered by their bigness. As a small bank, we know all of our people and our customers. We deal with them one on one. We have the ability to adjust to the client. It’s very important for a small business to have a relationship with their bank, especially because you never know when you are going to need them. And when you need them, you really need them.”
In addition to small business owners, most regular banking customers will at some point have a need for personal banking help.
“We recommend people come into a bank when they are having a complicated problem,” Williams says, “like if you are applying for a business loan, or beginning retirement planning. Come in and speak with a representative who can give you their experience and knowledge. We are still a small bank, and people know they can call us and we can solve their problems almost instantly because we know them.”
While local small banks can provide all of the same online access and amenities of the larger banks, personal services are something Williams touts as a unique advantage.
“For example,” he says, “we recently had a customer who lost his wallet while on vacation in Europe. He called us and we were able to FedEx him a replacement card, which he had within 24 hours. Other establishments weren’t able to do that for him.”
Online banking will undoubtedly continue to be the wave of the future, and local small and national large banks will continue to adapt and provide additional features, apps, access and security for consumers. Branches will become smaller and more efficient, and will adopt technology of their own. According to Ferris, however, physical banks will always be an important part of a community.
“Over time, we expect visits to your neighborhood branch will become less transactional and more consultative,” he says, “but the physical presence in the community is still vital.”
Common security terms and precautions:
Encryption the process of scrambling private information to prevent unauthorized access. To show that your transmission is encrypted, some browsers display a small icon on your screen that looks like a “lock” or a “key” whenever you conduct secure transactions online. Avoid sending sensitive information, such as account numbers, through unsecured e-mail.
Passwords or personal identification numbers (PINs) should be used when accessing an account online. Your password should be unique to you and you should change it regularly. Always carefully control to whom you give your password. For example, if you use a financial company that requires your passwords in order to gather your financial data from various sources, make sure you learn about the company’s privacy and security practices.
General security over your personal computer such as virus protection and physical access controls should be used and updated regularly. Contact your hardware and software suppliers or Internet service provider to ensure you have the latest in security updates.
Read key information about the bank posted on its website. Most bank websites have an “About Us” section or something similar that describes the institution. You may find a brief history of the bank, the official name and address of the bank’s headquarters, and information about its insurance coverage from the FDIC.
Protect yourself from fraudulent websites. Watch out for copycat websites that deliberately use a name or web address very similar to that of a real financial institution. The intent is to lure you into clicking onto their website and giving your personal information, such as your account number and password. Always check to see that you have typed the correct website address for your bank before conducting a transaction.
Verify the bank’s insurance status. To verify a bank’s insurance status, look for the familiar FDIC logo or the words “Member FDIC” or “FDIC Insured” on the website.
Source FDIC, FDIC.gov
Common Sense Banking
Online and mobile banking is a safe and secure way to handle your finances, but that doesn’t mean you shouldn’t follow some common-sense guidelines.
Greg Hassell, Chase Bank communications director for Louisiana, shares some tips on keeping your account safe:
Keep your passwords and account information safe. Don’t give out financial information such as checking account and credit card numbers—and especially your Social Security number—on the phone unless you made the call and know the person or organization you’re dealing with. Don’t give that information to any stranger, even someone claiming to be from your bank.
Don’t reply to an email, phone call or text message that does the following:
Threatens to close or suspend your account if you don’t take immediate action;
Tells you your account has been compromised, then asks you to give or confirm your personal or account information;
Tells you there are unauthorized charges on your account, then asks you to give your personal or account information; or
Asks you to confirm, verify or update your account, credit card or billing information.
If you have questions, call the toll-free number on the back of your credit or debit card, or visit a branch. If you ever suspect there is a problem with your account, call your bank quickly.
Be careful to create secure PINs and passwords. Don’t use birth dates, parts of your Social Security or driver’s license numbers, your address or your children’s or spouse’s names, for example. Someone trying to steal your identity probably has some or all of this information.
