Advancements in technology continue to influence the evolution of banking and financial services at a record pace, providing enhanced efficiencies, flexibility and speed. At the root of these innovations is an increasingly common customer requirement: Saving time.
As a result of the numerous time constraints facing the American consumer today, more and more are shifting toward alternative delivery channels -- multipurpose automated teller machines (ATMs), telephone banking services and now PCs.In fact, nearly seven out of 10 Americans now prefer to handle some or all of their borrowing, investments, bill payments or account reconciliation during nontraditional hours, perhaps during evening hours or on Sundays when bank branch offices aren't open.
According to many banks, use of electronic systems -- compared with visits to conventional bank branches -- authenticates customers' preference to access their accounts 24 hours a day, 365 days a year via convenience oriented systems.
For example, just four years ago nearly 60 percent of all of Key's banking transactions took place at a branch office. In 1998, in-branch transactions accounted for only 43 percent of our business. In 1999, this number is expected to drop to 30 percent. What's more, nationwide industry statistics suggest that we are not alone in this evolution.
Internet Banking Fuels Trend
While there is much discussion about the Internet as a tool for conducting banking and financial services business, online transactions actually account for very little of the overall volume. Currently, only about 1 percent of the nation's consumers are conducting banking business online (about 3.5 percent in Utah).
That figure is expected to rise rapidly in coming months, however, as online applications become more sophisticated and readily available.
As it now stands, most computer-based applications are still implemented through software programs known as personal financial management applications.
Programs such as Intuit's Quicken and Microsoft Money allow users to keep their books, conduct basic transactions and pay bills but don't offer the range of services possible with true Internet banking.
Real on-line services offer considerably greater benefit. Today's leading-edge, computer-driven services offer the same array of basic services as the personal financial management applications, and add to them a host of benefits not available through outside providers.
Our own online service links all four of our distribution channels (branches, ATMs, telephone and PC) on a real-time basis. Unlike most banks, which batch electronic transactions and download them at the end of the day, our service connects all of the distribution channels.
This four-channel, real-time link allows a customer to make a transaction by personal computer -- or any of the distribution channels -- and verify it through any other channel.
Just as important, customers have instant access to any funds transferred.
These real-time benefits can only be provided by the bank itself and only if all of their offices operate on a fully integrated platform.
ATM, Telephone Usage Still Strong
While Internet banking holds considerable promise, other convenience oriented banking services have a well-established, successful track record. ATM use, for example, has grown exponentially since the machines were first introduced in 1975.
At that time, ATMs accounted for roughly 10 million transactions totaling $1 billion. Twenty years later, the now-ubiquitous machines handle 10 billion transactions annually totaling $650 billion.
Telephone banking call centers have also expanded to handle growing consumer usage. Today, such call centers receive literally millions of calls each month -- nearly 4 million in ours alone.
If forced to conduct the volume of transactions that come in via telephone in a conventional branch office, banks would have to significantly expand their network of offices -- an option that would be prohibitively costly given the high cost of building, staffing and maintaining a branch office.
No doubt, the bank of the future will continue to offer a full line of services and financial products, fulfilling evolving consumer requirements.
Advancements in technology will continue to help banks focus on the consumer by granting them ease of access, different options to conduct their business, information resources that help them make intelligent decisions, and perhaps the most important benefit of all: Time.
Carol Davenport is president of KeyBank in Utah. Questions can be directed to her through the Deseret News, P.O. Box 1257, Salt Lake City, UT 84110.