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Andrew Tasset of Central Bank in Springfield converses with Columbia-based teller Beth Burkett via one of nine video teller machines in the area.
Rebecca Green | SBJ
Andrew Tasset of Central Bank in Springfield converses with Columbia-based teller Beth Burkett via one of nine video teller machines in the area.

The Changing Face of Banking: Banks offer online convenience, on-demand help

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Chime. Acorns. Stash. The names of some of the largest online banks have little in common with the community bank on the corner. They include active verbs and clever associations – an acorn, after all, is what a squirrel hides away as a hedge against hunger, but it has the capacity to grow into a mighty oak, a vision most people would like to apply to their savings.

An article in the ABA Banking Journal, “Time to Bank on a Name Change?” notes 62% of banks share a common word in their name. “Excluding the word bank,” it says, “two out of three banks use these same five words: state (18%), first (15%), national (12%), trust (10%) and savings (9%).”

Mark Harrington, president and CEO of Old Missouri Bank, realized he had a problem with his bank’s name, and these days most branding refers to the bank simply as OMB or OMB Bank.

“Things have changed a lot in the last few years,” he said.

It’s a name that doesn’t limit the bank geographically, laying down the welcome mat for customers beyond the Show-Me State – something OMB has prioritized in online and in-person banking. The bank had $495 million in deposits in 2021 in the Springfield area, according to Springfield Business Journal list research, but it has an eye for expansion, possibly even beyond state borders.

And OMB de-emphasizes a word that may be a turn-off to some customers: old.

“It’s better to be old than to be dead, but it kind of limits your demographics,” Harrington said.

Not your parents’ bank
A few decades ago, customers would make weekly trips to a bank to deposit paychecks and withdraw funds. Banks were quiet places, like libraries, and sometimes daunting ones, too, with marble, brass and walnut appointments, and pens on silver chains.

A 2022 digital banking survey by Ipsos-Forbes found 78% of Americans would rather bank digitally, via mobile apps or websites.

The FDIC reported branch closures increased 3.7%, with a net decline of 3,164 branches, in the year ending June 30, 2021 – the highest net percentage reduction in branches since 1987. In that tumultuous COVID-19 year, a lot of branches opened, too. Of 4,940 banks, 485, or 9.8%, opened branches and 401 (8.1%) closed branches.

Customers reported they most valued the ability to transfer funds among accounts, deposit checks and view statements and balances, all from their computers or phones.

The survey noted the COVID-19 pandemic forced banks to up their digital game to face challenges from online challengers, banks like Chime, Varo Bank or Current. These are fintech companies that typically specialize in specific offerings, like checking and savings accounts, as explained in “What Is a Neobank?,” a 2021 article in Forbes. These are not to be confused with online banks, like Ally Bank, which usually have a bank charter and provide a broader range of services.

It’s instructive to think of a new banking customer – someone just out of school, employed for the first time, with a paycheck (digital, almost certainly) ready to spend on shoes, and food and gas.

For this customer, it may feel as though most of life’s problems can be solved via an app. Why drive to a building to set up an account when it’s possible to handle the problem from the couch with a few thumb taps?

“We see that pressure from those national companies,” said Andrew Tasset, vice president and marketing manager for Central Bank in Springfield.

With $1.6 billion on deposit in the local market last year, according to SBJ list research, Central Bank has long been focused on providing a thorough mobile banking service for its customers, according to Tasset.

“Our mission is to have the best tech in the area,” he said.

Central’s mobile app allows digital deposits and bill pay, and it also has budget tools and a card on and off feature. It uses the Zelle digital payment network to allow person-to-person payments. Soon, Tasset said, Central will launch an investing option on its mobile app.

“We’re also getting ready to launch a new feature to our app where you can apply for a mortgage loan,” he said. “Rocket Mortgage has kind of been in the forefront of doing your mortgage online. Now, we’re going to be in that space.”

Central Bank won’t be changing its name any time soon, Tasset said.

“We try to appeal to a younger demographic for sure, but we do that through our technology,” Tasset said.

Aside from its mobile banking options, Central Bank offers video teller machines to customers who can pull up and talk directly with a person based in central Missouri, through touch-screen technology. The company is about to install its 10th such machine across its footprint.

Local focus
Derek Fraley is CEO of Systematic Savings Bank, which practically defines local: It has one building in the heart of the city, at Walnut Street and South Avenue, and it has been serving customers for 99 years.

“We’re pretty small, and we’re heavy on relationships,” he said. “We get the opportunity to make somebody a promise, and then we keep that promise.”

Most customers find Systematic by referral of existing customers, rather than advertising, Fraley said. Still, Systematic, with $53 million in total assets, is not opposed to growth.

Fraley said he has spent the last five years getting the bank on stable footing, noting in his first year, Systematic lost $1.3 million, and its second year it lost $247,000.

“Last year we made $187,000,” he said, adding this year is on track to double that gain.

“We’re growing very, very well through our organic network,” Fraley said.

Systematic’s app uses advanced technology, Fraley said.

“We’re on a core processor put in by my predecessors, and it’s a way better processor than what we need,” he said. “As much as it sucks that we’re paying that much for something we don’t need, it’s nice to have that available.”

Some people have the idea that it’s hard to do business downtown, Fraley said.

“Our products and services mean nobody has to come here,” Fraley said. The difference between a local customer banking digitally with Systematic and using an online bank is that they can.

“If someone ends up with a problem and they need someone to help them solve it, an app’s not going to do that,” he said.

Fraley said a new banking customer may be satisfied with a place to put discretionary savings, but things change when that customer needs a home, access to contingent liquidity or the structure to start a business. The wrong decision on any of these can paint the customer into a corner.

“Once you get to a point where you have decisions to make, that’s where online banks stop being a good option,” he said.

Personal relationships can mean a lot, as it turns out, Fraley said.

“Keep it simple,” he said. “You don’t have to turn the world of finance on its ear to succeed.”

Nichole A. Goddard-Bradford, regional director of retail banking and executive vice president of Commerce Bank, which had $1.6 billion in local deposits in 2021, according to SBJ list research, also believes strongly in customer engagement.

The Commerce Bank Connect app offers a middle ground between faceless digital interaction and an in-person visit by allowing customers to talk online to the banker of their choice.

“It allows them to talk to the banker that they choose on their schedule,” she said. “If they want to go back to that banker, that’s great.”

Goddard-Bradford said a lot of people still choose to visit a branch. Branches are always reviewed to determine if they are best positioned to serve customers, she said. Recently, a branch at Glenstone Avenue and Chestnut Expressway was closed based on analysis of activity and population trends.

“As we make those decisions, we always ensure our team members and customers have support and resources,” she said.

Commerce has been in the community for 155 years, and Goddard-Bradford said it is committed to maintaining a physical presence.

“We have people that choose to do digital most of the time, but when they have a challenge or a question, something a little more complicated, they choose to come in,” she said. “There are so many preferences, and we have options for all of those.”


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