Community bankers step up efforts to offer Internet services

Northwestern Financial Review, Apr 1, 2001 by Bengtson, Tom

* Community banks are quickly adopting the Internet as an essential service delivery channel, according to 519 bankers who responded to Grant Thornton's eighth annual community banker survey. Results were released atthe ICBA convention in Las Vegas.

Three quarters of the banks surveyed report having a Web site, up from 55 percent a yearago and 21 percent four years ago. In addition, 86 percent agree their customers want Internet access to their accounts. They also see widespread demand for online securities trading (61 percent) and even wireless access to bank and investment accounts (45 percent).

Most of the bankers surveyed (77 percent) said Internet banking services are important to their continued success. Some bankers see Internet-only banks as a growing threat; 30 percent of the surveyed bankers said such banks pose as great a competitive challenge as insurance companies.

According to the Grant Thornton study, 52 percent of the community banks with Internet banking services currently allow customers to monitor account balances, transfer funds and perform other banking functions via the Internet. The survey reveals that, among these bankers with Internet banking services, dramatic changes will occur over the next three years:

* Virtually all of these banks will allow customers to monitor account balances (91 percent) and transfer funds (90 percent) via the Internet.

* More than four out of five will enable customers to pay bills electronically (84 percent) and apply for loans via the Internet (81 percent). In contrast, only 41 percent of all community banks today offer electronic bill payment and just 22 percent accept online loan applications.

* The percentage of community banks offering cash management and other services for small businesses via the Internet will nearly triple to 74 percent in three years from 27 percent today.

* At the same time, electronic bill presentment from business customers to consumers will increase six fold among community banks, from 10 percent today to 64 percent in three years.

Grant Thornton is an accounting and consulting firm with a major bank practice. The survey originated from the firm's Washington, D.C. office.

* The ICBA donated $7,500 to the Las Vegas chapter of Habitat for Humanity during the convention. The money would otherwise have gone for entertainment. The Las Vegas chapter has built27 homes since 1991 and hopes to build another seven in 2001.

America's Community Banks, another industry trade group, has, for several years, donated money to a local charity in the city where it conducts its annual convention.

* Pot Dubois, chairman of the First State Bank of Sauk Centre, Minn., was probably the only person at the convention who attended the association's first convention, conducted in 1935 in St. Paul, Minn.

* A number of bankers from the North Western Financial Review readership area won prizes during drawings conducted at the end of the two general sessions. Jerry Bygren, Flathead Bank, Bigfork, Mont., won $500 in travelers' checks; Loren Beste, First State Bank, Sauk Centre, Minn., won two round-trip airline tickets to anywhere in the continental United States; Robert Dixon, Citizens State Bank, Sheldon, Iowa, won a set of golf clubs and bag; Jerry Frump, Bank of Shorewood, Ill., won two registrations and five night's hotel at next year's ICBA convention in Hawaii; and James Groholski, Southern Michigan Bank & Trust, Coldwater, Mich., won a five-day Caribbean cruise.

* James Brown, the analyst at FOX sports, closed the convention with a motivational presentation in which he outlined seven "essentials" for success. He said they are: communication skills; appropriate attire and appearance; promptness; a hunger for knowledge; good interpersonal skills; the ability to overcome adversity; and a foundation in faith.

Brown proved to be a real draw for the bankers, Immediately after his presentation, the general session closed with five prize drawings. Only those present can win. Typically, several names are drawn before the name of someone present is selected. After Brown's presentation, the first person drawn for each of the five prizes was present. This reporter has been covering ICBA conventions for 12 years; it's the first time he's seen that happen.