After 40 years of industry experience, I plan to share my thoughts on financial technology as it relates to community banking. My entire career has been spent at the intersection of financial technology and community banks. Way back when, it was called Data Processing, not a very flashy title, was it? Today, there is a lot of flash. And, some of it is just flash – but, there is a lot of substance as well.

Never before has banking been as dependent on technology as it is today. Consider this: in the past decade there has been a paradigm shift in the delivery of services to bank customers. In nearly every bank today, services are delivered to the majority of customers via technology rather than through or by bank employees. Even at the community bank level, nearly a majority of all routine transactions are being delivered via the internet, mobile devices, automatic bill payment, e-statements, text alerts, among a host of other nontraditional channels. And transaction volumes for these are increasing every year.

Technology costs remain one of a financial institution’s most significant investments. Keep in mind that it is the value of technology that should be measured, not just the cost. For instance, in the late 1970s for smaller community banks, a rule of thumb was one employee for every $1 million in assets. In many community banks today that ratio is closer to $3 – 4 million per employee. Technology has largely been responsible for improving such operating efficiencies.

Topics for my next several blog entries will be on vendor relations, service, and support. I can imagine hearing groans from some of the vendors as they read this. Don’t worry, I’m not going to point fingers and to name names, but as an industry critically dependent upon service, I have seen many areas in need of improvement. I will spotlight in future blogs some key areas where community bankers should expect and demand improved vendor service and support.