Banks adapt to changes in technology and customers

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COLUMBIA - Landmark Bank opened in Missouri more than 100 years ago. A lot has changed in that time, not just at Landmark, but other banks as well.

"When I got into banking 23 years ago I thought I was going to be bored, and boy have I not been bored. Things have changed so quickly that really our biggest struggle is to keep up," said Mary Wilkerson, the senior vice president of marketing at the Central Bank of Boone County.

In order to stay on top in a competitive industry, banks must meet customers' needs, and in today's era that means adapting to technology.

"Every time a new piece of technology comes out, whether it be you know, an iPad, a watch or whatever it might be, we have to understand how our customers might want to use that new piece of technology to interact with us," Landmark Bank senior vice president Nicholas Kieffer said.

Recently Landmark Bank added around 10 ATM's around Columbia, added video tellers at drive-thrus to expand service hours and began offering mobile banking.

Kieffer said the changes followed the shift of how customers want to interact with their bank.

"Customers are more comfortable making their deposits on their own terms and their own time frame and their own traffic pattern," Kieffer said.

But the constant race with technology doesn't come easy.

"On one hand you're pushing the envelope as far as you can technologically to provide your customers with as much service as possible and then you've got to the regulatory environment that says you can't do this and you can't do that," Wilkerson said.

She said the constant push and pull has created struggle in offering new products and service quickly. Yet the updated services are something the banks have to absorb to stay relevant.

With the increase in remote banking there has been a national trend of decrease in the physical space of banks. Data from the Federal Deposit Insurance Corp. reported since 2010 bank branches and offices in the U.S have declined by more than 2000. This decline is seen in Missouri as well, decreasing by 33 banks since 2010, according to data from the Missouri Department of Finance.

Wilkerson said it has only been in the last two years that banks have seen a decrease in the number of teller transactions.

As some customers decrease their interaction with tellers, they gain convenience, but lose the relationship aspect, which MU Finance Professor John Howe says is critical for local banks.

"Community banks make their living with relationships, so the thing that distinguishes them from the very large banks that are often in the headlines is they tend to be more relationship driven," Howe said.

For the Central Bank of Boone County, this means the responsibility of maintaining the relationship is on the bank.

From being out in the community, to hosting different classes and programs, the bank strives to connect with the community.

"In the way, way, old days bankers would sit in their desk and they'd be up high behind bars, and they would sit patiently waiting for the customer, well it doesn't work that way anymore, we've got to go out and get them, we've got to go out and talk to them, we've got to go out and build relationships," Wilkerson said.

Despite the decrease, Howe doesn't believe bank branches will ever fully go away.  He said some functions will always require person-to-person contact and banks also serve a wide clientele.

"The problem that banks have is they have to straddle a whole bunch of generations and they have to satisfy a whole bunch of generations," Howe said. "My parents would never dream of banking even online. They might go through a drive thru, but they're very much bricks and mortar kinds of people."

Wilkerson agrees that this is an aspect of banking that poises a challenge for the industry right now.

"We still have to have branches, we still have to have telephones, we still have to have fax machines, but we also do a tremendous amount of interaction with our customers online, through live-chat or online banking or mobile banking," Wilkerson said.

All agree that the shift of why people come in will continue to evolve.

"There might be fewer people coming in, but they're different types of conversations, which take longer, they're more advice, needs-based kinds of conversations," Kieffer said.

Kieffer predicts the shift in banks' role from a transaction-based to an advisory is something that will continue to evolve.

As the banks continue to find their place among developing technology, Wilkerson finds the bank will always maintain a place for customers to come for quality advice and a safe place for their money.

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