Digital Transformation | Hybrid Cloud | IoT
Tuesday, September 23, 2008
Small Community Banks, Big Managed Service Benefits
Community banks have attracted new customers by offering a truly personal banking experience that their larger rivals can't match, and by maintaining close ties to local communities.
However, all bank customers are demanding Business Technology driven services that many community banks simply can't provide with their current infrastructures. The lack of the latest technology can make migrating to new services prohibitively complex and expensive.
Community banks have depended on multiple providers for their voice and data networks. These banks found that they were paying substantially more for their network connections than larger institutions.
Moreover, having to deal with multiple providers can strain the smaller bank's modest IT staff. Implementing and operating a new converged voice/data/video IP network would overwhelm an IT team that usually handles simple tasks.
In addition, deploying a new IP network could negatively impact the community bank's operating budget. In fact, the total cost of ownership (TCO) for a typical bank's voice and data networks is second only to employee salaries and benefits.
Truly Demanding Operating Environment
Adding to these business challenges is the banking industry's strong emphasis on security and business continuity. Banks must be certain that their networks can pass their banking regulator's annual IT audit -- and deliver 24/7 services to customers in the event of a major disaster.
A strict regulatory environment and tight budgets make community bankers conservative when it comes to implementing technologies they consider unfamiliar. One solution that's proven, and likely to deliver lower operating costs, is the out-tasking of IT and communication network needs to a managed service provider.
A managed service solution can reduce a community bank's recurring voice and data expenses by 10 to 25 percent, with even greater reductions possible for larger banks.
Less Restrictions, More Freedom to Innovate
That said, an out-tasked IT and network infrastructure scenario isn’t purely about cost-reduction, it's also an enabler of customer service innovation. As an example, community banks are now deploying TelePresence applications that simplify the challenge of delivering full-service offerings at their distant branch locations.
A customer at an outlying branch can contact a bank officer at another branch and talk face to face without having to travel a great distance for the meeting. Plus, all required transactions can be completed locally.
Small community banks can now gain big Business Technology benefits, thanks to the creative use of managed services.