The Bank of Ann Arbor (BOAA), Michigan, is a community bank formed in 1996 that has grown to $1.7 billion in assets under management. While banking might have a staid image, social media event coordinator Matthew Altruda, who has worked for the bank for two years, was recently named one of the Top 20 Community Banker Influencers on Twitter by the Independent Community Bankers of America. We recently spoke to him, as well as to BOAA president and CEO Tim Marshall, about how technology helps community banking.
How can community banks compete with other banks, and how are you using technology to help with that?
Matt: When I first started working, I was a community builder in the local music scene, building community through music. I have a radio show, and the bank hosts a concert series, Sonic Lunch, every Thursday downtown. We bring the community together for a free live event to enjoy music. The idea was extremely exciting to me. I never thought I’d meet a CEO of a bank that was interested in building the local music scene.
With a community bank, the money is staying in the community. With other banks, the money goes to their headquarters. When our customers see us having enormous free concerts and giving back to nonprofits, they feel a part of it. The money they give us, they give back to the community.
Tim: A community bank is one that typically supports a smaller geographic universe. For the most part, a community bank is more geographic-focused/centric, improving the economy and jobs of citizens in the areas they serve. Everything’s being done right here. If I want to give Matt a loan and the underwriters have a concern, we can jump in the car and go meet the people. That’s more difficult if you’re an international bank, where the underwriters are in Phoenix, Ariz. It’s difficult for them to know what kind of person he is.
The neat thing about the technology is the cost of entrance has plummeted over 20 to 30 years. When I was starting my career, the cost of entry on new technology was prohibitively expensive for smaller institutions. Larger institutions were always at the front end, then the cost became more acceptable. Today, there’s very little the large institutions are doing that the smaller ones aren’t doing, such as an online banking platform. If you call up [Bank of America] or Chase, there’s not too much difference: You move money around, pay bills, send money, set up alerts, open new accounts, apply for a loan. You move through the spectrum – we have online banking, smart phone banking. I can make my deposit off my cell phone.
Our primary core processor is Fiserv. We buy modules. We acquired our consumer remote deposit capture module and our online banking module through Fiserv.The technology’s available through the Bank of Ann Arbor, and it’s available at Chase.
As banking gets more complex, what are you doing to help keep it simple?
Matt: We’re offering different choices for different demographics. The technology world is getting easier for people. My friend's 3-year-old knows how to use an iPad. By the time she’s 21, she’s going to think everything we’re doing is simple. People are used to technology and there’s not as much of a learning curve. We want to know people’s first names and have them come to us directly. Social media is the same way. We want a lot of interactions, with them tweeting to us if they have a question like “where’s an ATM in Plymouth.” We try to push out with social media, too. It’s all personal connections. We try to make things easier, not harder. When we launch a feature, it’s pretty simple.
Where do you see community banking going in the future?
Matt: It’s only going to get stronger. When I first started getting involved in the banking world a few years ago, I was in tune with the national stories of people not feeling safe with a big bank. Here, you have a person with a face you can talk to about finances. As technology is getting bigger, people want more face time with their finances, and answers directly from someone. Social media will help send that message. It’s the future of banking.
What I try to bring to the table is building community. BOAA wants to be a leader in the community for building small business, for little events in town like the science center for kids, and for concerts. We want to be a leader for how great Ann Arbor is, and what we’re doing to make our home a better place. We stress “home.” We live here, too. We have our kids in these schools. We make the community a better place by donating our time and supporting it.
Tim: As we came through this downturn, BOAA enjoyed an incredible amount of growth. It’s coincided with people’s interest in going local, establishing important relationships where they can be on a local basis, and helping the local community prosper and grow. There’s so much momentum in the digital world that it’s important to the bank to be a big player there and take advantage of the communications opportunities that Twitter and Facebook provide. We can do a Tweet and after a number of people have commented and RTed it, you can get 25,000 people on one simple idea.