We’ve seen it before; disruptive technology took over an industry and changed the face of business in that sector forever. Apple killed the music store but made song availability as easy as a click on your phone. The PC made the typewriter useless but added convenience and speed to our work and personal lives. Netflix, Redbox and the like took out Blockbuster and other movie rental companies yet helped proliferate convenience to the everyday movie watcher. In the end the consumer wins, their lives were improved with superior technology and service delivery.  The same is going on in the financial services industry. It’s not disruption; it’s improvement.

Yes, branch visits are declining yet the availability of financial instruments and opportunity to interact with an institution has never been more convenient. With fewer customers in the branch, the large retail location and supporting headcount is no longer necessary. And with this realization, Banks and Credit Unions are being forced to change and amplify the service delivery model rapidly.

What is utterly different about this scenario than the Music Store, Typewriter or Movie store is for the most part Banks are embracing the technology being used to shift their traditional model. And those sitting on the sidelines watching better heed the stories of industries that have seen a similar transition. When it happens, things move with mind-blowing speed.

A great example of embracing change for the benefit of the institution and the consumer is Customers Bank outside of Philadelphia, PA. Customers Bank had 5 branches and average deposits of $35 million per branch in 2010 and they knew they had to change to grow. They determined the key to accelerating growth was not through more branches but having the right people delivering services 12 hours a day, seven days a week via a mobile platform. That is exactly what they did.

Customers Bank rebranded itself to BankMobile and flipped the service model to match the name.  Every customer has a dedicated personal banker and a litany of fee free services from nationwide ATM access to text based P2P and Picture Bill Pay. You can lock or unlock your debit card with a single swipe and check your balance without the hassle of a full login process. If the sales pitch isn’t good enough to get you to sign up now, they invite you to try before you buy via a newsletter on financial literacy focused on the issues of today’s millennial.  And the content is good, not forced like most financial education appears to be.

The results are quite staggering– BankMobile has succeeded in becoming the fastest growing bank in the nation. Average deposits per branch have grown by an unheard of 500% per year and deposits have soared to 5.6 Billion. Today they have “offices” not “branches” in 3 states and a clear focus on delivering value to their customer.

The banking industry is going through change for the better. BankMobile is just one example in a growing group of innovators in the space actively improving the consumer banking experience. And while the long-term business model remains to be cemented, the days of sitting on the sidelines are over. If you do, you may end up with the likes of Blockbuster, wondering where your customers are and never figuring out Netflix won the war before you got to the battle.

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