While many banks may be embracing new technologies, like signing loan docs with a finger or giving customers remote deposit abilities, the community bank sector faces a dilemma – how do so and keep a “personal touch” relationship with customers.

“For us, the key to community banking is understanding our customers. That requires a heavier touch than a big bank,” said Bank of Marin Chief Information Officer James Burke, who worked 26 years at giant Bank of America and also did stints at Charles Schwab and Visa before coming to Bank of Marin five years ago.

That touch, Burke explained, means physically meeting and working with customers as much as possible. And that affects the bank’s thinking about technological changes.

“The way we think about technology here is not what’s old and what’s new,” Burke said. “It’s making every channel available to every customer. It’s not like branches are going to go away because we have mobile banking. We see our job to provide as many functions as possible.”

For Bank of Marin’s business customers, that means many of them can deposit checks remotely, either by a smartphone app for a few checks or using a faster “remote deposit capture” scanner for big batches,

If they prefer an old school method, they can come by the night deposit box at the branch and put their checks through the slot, or walk into a branch and work with a human teller who might just recognize them.

Tony Hildesheim, CIO at Redwood Credit Union, said that personal focus on what customers, who are also members, want is even more essential for credit unions.

“We’re a cooperative; every decision we make is based on what’s best for the member,” Hildesheim said.

That personal touch is easiest to achieve via in person interaction in branches, he said. A big part of his job is to figure out how to maintain it in the more remote interactions that technology allows now and will allow in the next few years.

Trimming branches

Bank branches, which permit that personal touch, will still exist in five years, said Burke, though they’ll likely be smaller places than in the past. That shrinking trend, which started years ago, will continue.

Five years ago, a typical Bank of Marin branch was about 3,500 square feet, said Burke, who also has facilities responsibilities as part of his job. Those larger branches were “very transaction oriented,” he said, meaning customers came in, stood in a roped off line, and made a deposit or withdrawal with a teller. Today, the average size of Bank of Marin’s 23 branches is nearer 2,000 square feet.

And the typical branch staff of five or so employees there are required to know a wider variety of things than in the past. People come to a branch more for customer support or service issues than just to move money around, and he expects that trend to continue.

That means branch staff have to be trained differently, as there are fewer of them to do all the things required.

“A smaller number of people who have to know more about everything,” Burke said. “We really have to upgrade the knowledge base of our employees.”

But branches aren’t likely to shrink too much more than they have already, either in size or in staff, he said. Bank of Marin has one 1,600-square-foot branch that feels “pretty tight,” and he can’t see one ever being much smaller, or employing fewer than at least four or five people.

Physical design and the widespread use of technology, such as handheld devices, will make that small space seem bigger and allow a few employees to punch above their weight in future branches, said Redwood’s Hildesheim.

“If you took the time to drive someplace, you expect a certain experience, a concierge experience. You don’t expect to be treated like a number,” he said. Branches will exist in the future to provide what Hildesheim called “value added service,” rather than just for moving money around.

“Moving money should be easy,” he said, meaning customers should be able to do this basic banking function anyplace.

Follow the money

Roped off lines snaking towards teller windows are already heading towards extinction, both Burke and Hildesheim said. Cash handling technology has helped facilitate that, by letting branch workers come out from behind the counter while still accepting or paying out cash.

In the past, the teller counter provided a relatively secure space for bank employees to handle money and keep cash drawers. But it was a cumbersome process, said Burke.

“A branch manager would spend 50 percent of the day moving cash to the vault with another employee,” said Burke.

Now instead to putting tellers behind the counter with a cash drawer, banks can have the employee walk the bank lobby, accepting cash or checks and then putting into a small, secure “cash recycler” that accepts and dispenses money, and which can also count cash and spot counterfeit bills.

The idea frees not only the teller from having to stand behind a counter, but also cuts the time a manager spends hauling cash to the vault to about 10 or 20 percent of the day, Burke said. That frees the branch manager to interact more with customers.

Hildesheim said employees with handheld devices can now do most transactions anywhere in the branch.

“Anyone can take your deposit on a tablet without a cash drawer,” he said.

In five years, he expects all branches to have the feel that some already do – “more of a conversational space.”

“When you walk in the branch and you want to deposit a check, you’ve maybe seen the person who takes it before – they smile and say, ‘Thanks, we’re glad you came in today,’ and you walk out smiling,” said Hildesheim. “How do we keep that touch?”

When it comes to technology, Hildesheim said he wants a person who uses an app for mobile deposit to have the same feeling of having interacted with a real person as a member who drove to a branch to conduct their business.

“How do you do that online and in a non-creepy way?” he said.

For Redwood Credit Union, the answer has been to keep the technology simple and straightforward from the customer’s perspective, such as a simple text message query when the credit union’s computers suspect ID theft or fraud.

“We’re just going to text you, and you can text back yes or no,” he said.

In mobile banking, Hildesheim tries hard to keep the language clean and clear, like a teller would use in speaking to a member in person – “Your deposit’s done” rather than “transaction complete,” for example.

“It’s a really difficult question to answer,” said Bank of Marin’s Burke about humanizing technology. He said his bank has deliberately waited on some available technology, such as video kiosks that allow remote consultation with a banker in a different place, simply because they aren’t compelling. But they may eventually be something customers want, in which case the bank will consider them.

For Burke, the question isn’t so much about humanizing the technology itself as it is about keeping Bank of Marin human by staying involved in the community it serves.

“It will be slightly harder” in five years, he said. People are naturally going to do more of their financial chores remotely, so the bank will have to find other ways to meet them in person.

“The beauty of being a community bank is we don’t just see them when they come in a branch,” he said. “We are out there at events and we know our market and our communities.”

Sign of the times

One big way banking is changing and will continue to transform over the next five years is in the use of digital identification for security and in digital signatures.

Digital signatures themselves are nothing new, but Hildesheim said the next wave will be easy, ubiquitous “sign on glass” technology that allows customers to write their signatures on documents using their finger or a stylus on any phone or tablet type device.

One thing reining banks in is regulation, said Burke, who also expects a lot to change in this area in the future.

“Banks are highly regulated in the electronic signature space,” he said. But already transactions as complex as loan approvals can be done completely remotely, he said, without the applicant ever having to come into a branch.

Even some of the most formidable and document heavy transactions may soon be done online.

“We’re right in the middle of electronic notary,” said Hildesheim. “The state is experimenting with the rules.”

Both Hildesheim and Burke expect further advancement in biometric authentication of transactions – fingerprint and facial recognition technology already exists on consumer devices, while some form of retinal ID will soon be widely available, too. Those biometric systems will make remote transactions easier and safer, but they can also be installed in branches to speed up the work there.

Thomas Sands, region president for Wells Fargo Northern California, said biometric ID systems are evolving quickly and now include an “eyeprint” some customers can use via their phones. Wells Fargo customers can also record a voiceprint for access to the bank’s call center if they want to simplify that process.

But though new devices and systems are exciting and convenient, they take time to be widely adopted and to become comfortable for users. Some of them are sure to be widespread in five years.

“It’s too soon to say when these new technologies may permanently replace the password,” said Sands, “but we’re clearly excited by the possibilities this holds for the future of authentication.”

The adoption of much of this new technology requires either regulators or banking software and technology vendors to study and approve it even before the banks themselves can try it out.

Burke pointed to primitive password technology as an example. “The industry will tell you that if you have a ‘passphrase,’ that’s more secure than an eight-character password,” he said. “But most vendors don’t support that yet.”

But that will surely change, he said. “A few years ago we didn’t have touch ID, logging on with your fingerprint. Now we have that.”

Ultimately, for smaller banks and credit unions, customer experience will continue to influence the way technology is incorporated into the bank’s services. While big national banks may be able to afford every technological gizmo that comes along, smaller banks will be more choosy, said Burke, and not just because the technology is expensive, but because their customers have deliberately chosen a more personal institution.

Burke said his customers sometimes tell him they don’t want all the fancy stuff anyway: “If we wanted a big bank look, we would go to a big bank."