Technology reduces need for some bank employees

Lobby traffic hasn’t matched pace of deposit growth
"It would be easier if you asked what areas of banking aren˜t changed by technology," said Dick Salberg, president of First National Bank in Longmont. "I would say Ônone.˜"
Technology has expanded customers˜ banking choices from few and far between to many and conveniently located: Today˜s customer can select the traditional, people-service-oriented banks or "virtual banking" by computer. The phone can be their bank. A little screen at the grocery store that offers options in English and Spanish called an ATM machine can be their bank.
The biggest change for banks themselves, bank executives agree, are customers˜ options to access, and the corresponding decrease in the number of employees it takes to serve each customer. "Back-room" procedures such as bookkeeping and check handling can be performed by the computer and one operator.
Although most bank executives are reluctant to link the word "layoffs" in association with new technology, there has at least been an increase in the capacity of each employee. Technology has felled the former industry standard of one employee per $1 million in deposits. Today, the ratio, for a small bank, is around one employee to $2 or $3 million in deposits, bank executives said.
Jerry Starks, president of Citizen State Bank in Keenesburg, said that in the last 10 years he˜s seen a 25 percent increase in customers, has seen the bank staff decrease by two employees and has noticed that, "Our lobby traffic stays the same, even though our customer base grows."
Salberg agreed that the number of ways customers can be served — with ATMs, phone banking and Internet banking — has increased dramatically. At First National Bank, there has also been a corresponding decrease in the number of employees it takes to serve a customer.
In about 1991, First National Bank lost 10 employees due to natural attrition, Salberg said. Already in the process of upgrading its computer system, the bank didn˜t immediately rush to fill the positions. Bank officials found that doing new accounts on a computer took one person, instead of three. The teller˜s ability to input information, as well as computerized customer accounts, also decreased the bank˜s employee need. The bank now has 105 employees; a count Salberg is convinced would be higher if it weren˜t for new technologies.
"We haven˜t downsized, but technology has allowed staff to do more," Salberg said.
According to Starks, loan departments and deposit departments aren˜t physical locations you need to go to to get information. The number of paper transactions has decreased: The debit card is replacing the check.
"When I started in the business, you had to go to the loan department or the deposit department," Starks said. "Now I can key in a customer˜s name and know every loan or deposit he˜s had and when."
The paperless nature of technology was also notable to Dave Armstrong of KeyBank of Colorado in Fort Collins. Armstrong has been in the business since 1959.
"I was talking to a banker my age who wanted a stock power form (to sell a stock). I looked for the form in a file thick with papers. I must have looked for that form for 10 minutes. When I asked my assistant to help, she found it in about three seconds by hitting just a couple of keys on her computer," Armstrong said. "Here was a form she didn˜t know much about yet she was able to find it."
But he pointed out that technology hasn˜t come up with a way to make the loan process faster, and tighter regulations for bank lending has lengthened the paper trail. Gone are the days when a customer could get a $10,000 loan in a matter of minutes. Legal-paper sized forms, many of them, have to be filled out to satisfy truth-in-lending and rate-disclosure laws.
"The terms of a credit request can take 30 minutes to an hour," Armstrong said.
But Armstrong listed the ability to be one bank, coast-to-coast, as the biggest change for KeyBank of Colorado in Fort Collins. Banks assets skyrocketed from $69 billion to $672 billion, he said.
KeyBank˜s new financial strength is fueled by both technology and the loosening of branch-banking laws in this state. In real life, it allows the Colorado customer˜s child attending college in Anchorage, Alaska, the ability to access his or her parent˜s bank account at the KeyBank where they live.
Both Wyoming Bank and Trust Co. in Cheyenne and Park National Bank in Estes Park are making commitments to major pieces of new equipment. Upgrades are necessary due to new regulations, Internet banking and lack of vender support for their old computers.
Jeff Wallace, vice president of Wyoming Bank and Trust, said that the bank˜s new computer, installed about six months ago, allows it to offer overdraft protection, home equity loans and to stay in compliance with regulations regarding business checking accounts. Wyoming Bank and Trust has even added a page on the Internet — it˜s more like an advertisement than virtual banking — to keep up with the Joneses.
In August, Park National Bank president Robert Porter said, he was in the middle of 20 stacks of paper/computer bids.
"Our computer is 8 years old," he said. "It˜s over the hill." He said the purchase will make it possible for Park Bank to offer phone banking and Internet banking, although he wasn˜t sure it would immediately begin to offer such services. Park Bank already has debit-card banking, but doesn˜t own its own ATM.
Porter said he plans to move cautiously as far as Internet banking is concerned.
"There is a lot of fraud now in Internet banking," he said. "I would need to see safeguards, because I think there will be a lot of loss. It˜s just not cost-justified for us now."
Wallace said he believes that no matter what the technology, the personal service market will always be there.
"While the big banks get bigger, the small banks just get more focused," he said.

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