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Howard Bank courts young customers by showing the value of face-to-face communication.

Digital age for banking brings challenges

In an age when many major financial transactions can be done on a smartphone, the days when people would have to come into a bank and get in line to deposit a check are long gone. Even basic money management tools are available on websites and apps.

One research firm reported that Venmo, an app that lets users pay people from their phones, is experiencing $1 billion worth of traffic each quarter this year, a 150 percent increase from the previous year.

Banks from Bank of America to Capital One to PNC offer mobile apps to let people deposit checks and do other transactions from their phone. Ally Bank has done away with physical branches altogether and does everything online.

Young Bankers with Howard Bank, from Left, Steve Poynot, Senior VP Chief Credit Officer; Nick Demyan, Relationship Annalist; S. Tyler Wright, VP, Relationship Manager. (The Daily Record/Maxmilian Franz)

Young Bankers with Howard Bank, from Left, Steve Poynot, Senior VP Chief Credit Officer; Nick Demyan, Relationship Annalist; S. Tyler Wright, VP, Relationship Manager. (The Daily Record/Maxmilian Franz)

For a community bank like Ellicott City’s Howard Bank, while the essence of banking is still the same, the digital age of banking brings new challenges.

“Everyone is looking to be connected to their money as opposed to face time,” said Steven Poynot, 37, senior vice president and chief credit officer at Howard Bank.

Now in its 11th year, the rapidly growing Howard Bank is approaching $1 billion in assets, the foundation of which was built by courting one customer at time. From 2004 to 2012, the bank went from $20 million to $400 million in assets by expanding its branches and offering residential mortgages. The bank prides itself in providing face-to-face customer service.

“With technology, it’s less personal,” said S. Tyler Wright, Howard Bank’s vice president and relationship manager.

Wright said he tries to maintain his relationship with customers by being responsive and making transactions as quick as possible.

“I get antsy when I don’t respond right away,” he said.

Depends on the transaction

Nick Demyan, 27, came to Howard Bank three years ago, even though he had background in chemistry.

“Coming into banking was not my initial choice,” he said. “It was something I picked up on. I like having the face-to-face relationship.”

As a relationship analyst, Demyan experiences the challenge technology poses for banks first-hand.

“It’s very difficult today to even generate a relationship with people who are millennials.”

However, while younger customers prefer to do everyday money exchanges on their phone, for more serious decisions such as getting a mortgage, those customers opt for face-to-face communication.

“Just getting a mortgage isn’t necessarily the end game. It’s about getting good advice,” said Howard Bank CEO Mary Ann Scully.

Being publicly traded also limits how much risk a bank can take. In the case of startups, newer companies may opt for websites, such as Kabbage, which offers six-month loans of up to $100,000. But for companies that are already on their feet, a smaller bank can be a good resource.

“We get to help them respect banking for what it can do,” said Poynot.

But even on the digital front, there’s a lot there’s a lot of work to be done for banks. For Poynot, one of the things the industry needs to work on is giving people their money faster, giving the example of a three-day hold that is often put on credit card refunds.

“Everyone should get their money quicker,” he said, “How do we speed up the money system?”