I was talking with one of our financial institution clients the other day.  The bank at which he works boasts only a handful of branches situated in a very localized footprint.  Despite this, the banker was at our facility to meet a Tax Collector for a city well outside this footprint for a tour.  In fact, this particular bank was aggressively – and successfully – going after municipal relationships all over the state.  When I remarked to the banker that their marketing efforts had not gone unnoticed, the banker replied that lockbox has enabled the bank to greatly expand their deposit gathering efforts.   It stands to reason, if you sell a suite of cash management products that aren’t limited by geography, then why should you as a bank limit yourself to geography when attracting customers and deposits?

As customer usage patterns have evolved over the past ten or fifteen years, banks are starting to think differently about how and where to market.  Before Check21, the conventional manner in which deposits were made (over the counter at a branch or at a bank-branded ATM) necessitated that customers remain in geographical proximity to a brick and mortar branch.  Banks, keenly aware of this correlation, would focus their marketing efforts within their branch footprint to maximize effectiveness.  Marketing operated this way for many years.

With the advent of newer technologies such as Remote Deposit Capture (RDC) and mobile banking, businesses have realized that proximity to a branch is no longer as mission-critical as it used to be.  Internet only banks are further promoting the mindset that brick and mortar branch banking isn’t absolutely necessary in order to effectively manage cash flow.

Banks are capitalizing on this mindset by developing specialties within industries with robust cash flows from operations, such as property managers (rent), municipalities (taxes), or healthcare then leveraging that specialty by expanding their marketing efforts well beyond their geographical branch footprint.  The value proposition in this situation is self-evident: Go with a bona-fide expert, not simply with whoever is closest.

Unhindered by geography, this allows banks to focus their marketing efforts on areas with the most opportunity.  Thanks to search and the Internet, it doesn’t take a colossal budget to market your services nationwide.  A fully search engine optimized online presence and some effective keywords associated with your online ad campaign is all it takes to market effectively. In this way banks are becoming more potent pushing for deposits well beyond their own backyards.  With interest rates ticking upward for the foreseeable future, banks must think more creatively when trying to attract lower cost deposits.

If you’re a bank searching for new ways to attract deposits, offering lockbox may be an answer.  Lighthouse Payment Services would be happy to show how we can add value both to the bank, and to your cash management customers.  Give us a call!