Pandemic Pushing Banks Deeper Into Digital Realm

Natalie Bartholomew, chief administrative officer of Grand Savings Bank, said “If banks haven’t made a push toward some type of innovation, it is going to be blown wide open for them right now.”

There will be a new normal for the banking industry after the coronavirus pandemic lifts.

Banks across the state have closed their lobbies to foot traffic in an effort to protect employees and customers from the virus. Some banks, such as Simmons Bank, have temporarily closed entire branches to consolidate resources at other facilities. (See Simmons First Shrinks Branch Operations.)

Banking officials in the state said the pandemic drove home an unmistakable truth: Banks without a digital presence are at a drastic disadvantage.

Natalie Bartholomew, chief administrative officer of Grand Savings Bank in Bentonville, is homebound in Prairie Grove, but her fate has been bearable because Grand set up an online banking platform in January and worked through the process before the pandemic.

Bartholomew doesn’t want to think about what would have happened if the platform hadn’t been in place.

“If banks haven’t made a push toward some type of innovation, it is going to be blown wide open for them,” she said. “Most of the banks in northwest Arkansas have done that, but maybe some of the smaller banks in the rest of the state may have not.

“Anytime you roll something new out, there are pain points, and I’m so thankful that we got the kinks worked out when we did because it has been extremely helpful. In hindsight, we had no idea this was coming, but we had some things in place that set us up — I don’t want to say for success right now — but definitely put us in a better position.”

Snapshot

In the pre-pandemic economy, a growing segment of the population embraced online and mobile banking. Now customers who resisted technology, who continued to go inside a branch to do business, may be forced to change.

“There will be some changes in banking, as there likely will be in daily life in general,” said Jason Kincy, chief marketing officer at Arvest Bank. “Times like these can lead to innovation and rethinking how you do business. That’s particularly true in terms of streamlining processes and the delivery of banking services to customers.

“One area we’re seeing some impact is in the adoption of digital channels by customers who have in the past been resistant to them. We already had high adoption rates for these channels, but every day we’re seeing customers sign up and use them for the first time. By the time this situation is resolved, we expect to have a customer base that is more digital-savvy and more accepting of new digital solutions.”

Online Accounts

Bartholomew said that is one opportunity where Grand Savings, unfortunately, will have to wait. The bank had planned to launch a platform where customers could open an account online, but the pandemic has postponed that.

Working remotely has jumped to the forefront for most businesses, and banking is no exception. Jon Harrell, chairman-elect of the Arkansas Bankers Association, said some banking can’t be done from home because of security issues and customers’ personal financial information, but advances in technology have made remote work more efficient.

Bartholomew, with Grand Savings Bank, said bankers routinely hear about the need to innovate and provide a hefty array of digital services. It has been a constant and common pitch at conventions and conferences.

“You can read articles and case studies all day long and go to conferences and see all the demos, but what we are living through right now is like a massive science experiment,” Bartholomew said. “I don’t want to desensitize what is happening, but for businesses, you will see a shift to delivery and the type of services we haven’t considered because we are forced to. We have been told we needed to think about it. Now we see the opportunity cost of not doing it.”