A Hybrid Approach to Banking, by Kevin Hogan

Mastering online essentials and leveraging in-person perks

In an era where we can send money through a text or pay bills with one click of a mouse, banking has never been easier. For consumers, it’s beginning to feel as though new technology is making traditional brick-and-mortar banks obsolete. According to a Federal Reserve study, 71 percent of people interact with their financial institution online and 38 percent of smartphone users worldwide utilized some form of mobile banking. Alternatively, small business adoption of banking technology is lagging behind, with many businesses still turning to traditional bank branches for benefits that mobile and online tools can’t provide.

Savvy businesses should tap the efficiencies of online tools while also leveraging the benefits of relationship banking that digital self-service can’t provide. Finding the right mix can dramatically increase a business’s bottom line and help better plan for the future. However, determining which services to use, online vs. in-person, can be a challenge so arm yourself with the information of what services and conversations you should approach face-to-face vs. finger-to-phone.

Businesses should master the basics of banking technology to increase productivity and save time:

• Rapid Account Setup: Many banking apps have created do-it-yourself portals that reduce the legwork and friction involved in opening a new account, saving people a lot of time and trouble. In fact, according to a Javelin Strategy and Research survey, just five percent of customers that visited a bank branch applied for a new account or product.
• Fraud Alerts: According to that same survey, more than half of American adults received mobile alerts and push notifications from their bank in 2015, and similar services are available for businesses. Online bankers can easily set up their security settings to be alerted instantly when there is suspicious activity on an account and can often stop the fraudulent activity before it happens. Without online notifications, consumers and businesses have to rely on a phone call or a retroactive refund after reviewing statements.
• Remote and Mobile Deposits: Most banking apps now offer the technology to make mobile checking deposits with a tap of your finger, saving you the time and effort it takes to go to a branch and deposit checks. Remote deposits can also expedite access to cash flow and decrease costs associated with traditional paper-based banking.
• Increased Efficiency: With the ability to apply for a loan, transfer funds and set up automatic bill pay all through a web portal or mobile app, e-banking provides the capacity to streamline processes and greatly increase efficiency across a business. In fact, Federal Reserve research finds that the average small business spends 25 hours on paperwork to apply for loans – with mobile and online banking, loan applications are often completed in just 30 minutes.

• Bookkeeping software: Not only do software applications seamlessly integrate with your business, tools like QuickBooks can comprehensively replace many traditional accounting services like payroll, automating payments and creating invoices – and they can interface directly with your bank’s accounting systems.

Perks that only come with personal relationship-based banking:

• First-name basis: While mobile apps and online financial management tools provide one-size-fits-all advice or blanketed ‘best practices,’ sometimes there is no substitute for a banker who knows your face and name and your business’s goals and roadblocks. A banker who has an intimate understanding of your financials is able to advise you on tailored short- and long-term planning strategies that online tools can’t provide. Not to mention the simple convenience of not needing to show your ID or jump through hoops to prove your identity and account details.
• Streamlined Management: Branches partner with a business to help manage accounts receivables and cash flow to ensure the business continues to run smoothly, affording many business owners more time and energy to focus on other critical tasks.
• Problem solving: A face-to-face meeting is often the best way to solve complex business and personal finance problems. By calling on your personal banker to help find the solution, not only will they have the historical knowledge of your accounts, they will also be able to leverage their team’s deep expertise to partner with you to creatively solve small and complex problems.

• Special offers and services: Having a relationship with your branch also allows you to leverage special products or services, which your app or online account wouldn’t otherwise offer. Most brick-and-mortar banks offer ancillary services such as a public notary, safety deposit boxes, currency exchange, business or personal loans, retirement plans, cash management and more.

There’s no question that online banking is the way of the future and businesses must embrace and master the basic functions of online banking for their commercial accounts. But smart businesses shouldn’t shirk the merits of the time-tested approach to relationship-based banking with their brick-and-mortar branch. By taking advantage of the convenience, flexibility and efficiency of mobile and online banking and combining it with the personalization, management and additional services and expertise a branch can offer, you can combine the best of the old with the new and get the most out of your business and your financial institution.

04/2016