State’s community banks getting more high-tech

Filed under: Banking & Finance |

Community banks cater their lending services to local businesses. They’re oftentimes privately owned and don’t have the resources that the nation’s giant, mega banks have at their disposal.

But that’s not stopping community banks from making technology strides.

Data security and check imaging are top priorities for community banks, according to the sixth annual Community Bank Technology Survey, conducted by the Independent Community Bankers of America.

More than two-thirds of community banks offering online banking services use an intrusion detection service. That’s up from 38 percent a year ago.

Nearly 48 percent use intrusion-prevention software, up from 25 percent last year. And, nearly three-fourths of community banks have 24-hour, seven-day-a-week network monitoring, according to the report.

Also, the use of imaged-check clearing networks more than doubled to 28 percent this year, up from 12 percent last year. The networks are expected to enable more banks to clear and settle checks in a more expeditious manner.

About 52 percent of community banks plan to evaluate imaged-check clearing networks within the next 12 to 18 months.

The survey also showed that community banks are spending more on technology, with 54 percent reporting that technology budgets increased in 2006 compared to 48 percent of banks that increased technology budgets in 2005. About 83 percent reported having the ability for customers to view imaged checks online, compared with 61 percent last year.

And, about 24 percent of community banks have adopted e-mail statement delivery, up from 16 percent last year.

Good conversationalists make good planners

Small talk can go a long way in making a good financial planner.

A study shows that basic communication skills — especially those about non-financial topics, are crucial to strong adviser-client relationships.

The University of Missouri-Columbia conducted the study, called The “2006 Survey of the Elements of Communication That Affect Trust and Commitment in the Financial Planning Process.”

The idea is that planners who best understand the core ethical values and interests of clients are more likely to lead them toward truly rewarding investments.

Nearly 83 percent of clients and 84 percent of planners agreed that they must understand a client’s values and priorities before they can give effective financial advice. Strong communication about non-financial topics was the best way to identify key goals and objectives, the study noted.

Planners and clients that were surveyed appear to agree.

About 95 percent of clients and 93 percent of planners either “agreed” or “strongly agreed” that it was easier to engage in conversations about non-financial issues.

The study was based on a nationwide sample of 554 planners and 120 clients taken during the first quarter of 2006 by the Financial Planning Association and the Certified Financial Planner Board of Standards Inc.

NASD slaps Chase, MetLife with fines.

The National Association of Securities Dealers has ordered Chase Investment Services Corp., a unit of New York’s J.P. Morgan Chase, and MetLife Securities to pay $1.66 million for failing to supervise the sale of 529 College Savings Plans.

The regulatory agency said it found that neither of the organizations had established systems and procedures to govern the sale of the plans.

Each firm was ordered to compensate customers affected by the failure and additionally fined $500,000.

Chase will pay about $288,500 to nearly 300 customer accounts, while New York-based MetLife will pay about $376,000 into a similar number of accounts.

Between January 2002 and March 2005, Chase and Metlife, allegedly sold the plans without providing specific criteria or guidance to clients. Also, the firms failed to establish criteria for supervisors to use when reviewing the reasons representatives sold 529 Plans.

The actions are the second and third cases resulting from the NASD’s examination sweep of 529-plan sales.

In October 2005, NASD fined Ameriprise Financial Services $500,000 and ordered it to pay about $750,000 to customers.

Chase and MetLife settled without admitting or denying the accusations.

More insurers choosing offshore asset management

About 69 insurance companies outsource at least a portion of their general-account assets to unaffiliated investment managers. That figure represents a 64 percent jump in the outsourcing activity since 2002, according to a survey conducted by Eager Davis & Holmes.

The survey also showed that the average percentage of assets outsourced to external managers increased at an even greater rate, with about 68 percent of insurance company assets being managed externally. About 56 percent of firms relied on external management in 2002.

The survey canvassed 84 insurance companies with a total of more than $1.1 trillion in assets.

Rob Larimer covers banking and finance for the Colorado Springs Business Journal.