|Going Totally Paperless - Platinum Bank|
|Tuesday, 30 October 2012 6:24pm|
Minnesota’s Platinum Bank adopts an all-electronic operational strategy and ethos
By Tim Cook
At Platinum Bank, there’s virtually no need for paper clips, staplers or hole punches. There are no rows upon rows of file cabinets either. That old-world office clutter just doesn’t exist at the $160 million-asset de novo community bank. It isn’t necessary.
That’s because Platinum Bank, a single-office small-business boutique in the Minneapolis suburb of Oakdale, Minn., operates on a paperless business model. President and CEO David Rom and his team engineered an all-electronic operating environment from the ground up at the five-year-old community bank. “From day one, we were a paperless bank,” he says.
“We had a good schematic idea of how it was going to work for the bank. Then set it up to implement it, go through a beta test and use it live and make adjustments,” Rom says.
The result is an almost fully digital operating model. Loans are originated, closed, monitored and reported on electronically throughout their lifecycles. Deposit accounts are opened with all paperwork stored digitally. Full histories and relationships with customers are viewed and shared on a single screen. Internet and mobile banking and cash management, remote deposit capture and check and document imaging create all-electronic transaction environment. (The bank’s only missing digital link is full electronic signature signoff of loan documents for borrowers, a capability that will be available soon, Rom says.)
Platinum Bank’s on-the-go staff and customers are located all across town but still connected through smartphones, tablets and laptops. Information is fluid and accessible, available in real time to the right people, or teams of people, in the best format. This digital environment fits today’s highly mobile, collaborative and heavily consultative world of community banking, Rom says. “I can make much better decisions more quickly.”
Meanwhile, more than 90 percent of Platinum Bank’s customer transactions are also handled electronically or remotely. Only a few customers don’t receive imaged statements, and then only because it’s by their own request. About half of the bank’s customers have never set foot inside the bank’s plushy headquarters, where a wall of flat-screen TVs broadcast the latest financial and world news in a living room-like setting.
“We tend to go to where [our customers are],” Rom says. “When they do come in, it’s all about maybe having a meeting.”
Working with five technology service providers offering systems in all respects available five years ago, Rom says he designed Platinum Bank’s operations to fully leverage today’s technology, to allow Platinum Bank to operate more efficiently with less staff and in the ways its customers most want to be served. In one spot, any spot, the bank’s staff can call up any detail of the customer’s financial life. “If you’re with the customer, he or she is demanding things in real time,” he says.
Just as important, Rom says, digital workflows allow Platinum Bank to operate more efficiently. The bank’s average assets per employee ranges between $10,000 and $13,000. For most banks, the efficiency measure ranges between $4,000 and $6,000, he says.
What’s Rom’s main advice for other community banks looking to adopt a fully paperless operating environment? Just do it.
Rom, who has given many other community bankers tours of Platinum Bank’s operations, says every community bank can achieve a paperless operating environment. All it takes is a steady commitment to provide steady focus on putting systems in place, one at a time if necessary. Cost, complexity or current staffing levels shouldn’t be barriers, he says.
“It is painful; it takes time,” Rom admits. “It takes time to run it properly. But it really is a mindset to having a commitment to doing it.”
And Rom dismisses notions that engineering a startup bank’s systems provides an overwhelming technology advantage over well-established banks: “A bank that is up and running already has systems working and should be profitable. If figuring out how to reengineer your back room is your biggest problem, that’s not as much of a problem.”
Rom says how community banks fully take advantage of today’s technology will soon make the difference to their success or failure. “I don’t think it’s a matter of whether it’s here. It’s when you’re going to do it.”
Tim Cook is ICBA’s senior vice president, publications.