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PCBB Banc Investment Daily May 06, 2013
Banc Investment Daily
May 06, 2013


No, really - we can't live without a cell phone or a tablet. If someone had said this 10Ys ago, we would have scoffed and told them to just get over themselves. Times have certainly changed, as we would bet almost everyone reading the Banc Investment Daily (BID) this morning would have some difficulty if the smartphone clutched in your sweaty paw were to disappear without a trace. Our lives have transformed enormously in the last 10Ys and things are still moving. This is the 2nd wave of technology, the 1st being the personal computer revolution.
As bankers, everything is going mobile and we have worked hard to keep up with the many changes around us. Bankers have developed internet banking sites, online bill-pay and launched mobile banking offerings. Now in the pipeline and already instituted by the big banks, mobility has gone viral and appears even on ATM machines. Everything is more portable than it used to be, so people interact with their banks much more frequently and expect those interactions to be convenient.
Everyone knows branch traffic continues to decline, as people use their gadgets to do most of their banking wherever and whenever they want. One area rarely discussed, however is the transformation of living and working spaces that has been developing for some time across America. This is important because community banks are big CRE lenders, so long-term planning for your bank and your customers is important. Customers have changed, so branch space must change too.
For around 50Ys, nearly all development of real estate was based on a suburban model. Emphasis was on easy access for cars and this caused movement away from the center of cities. For some time now, there has been movement back towards the middle of cities and towns, with restoration of historic centers and population returning to urban centers. People want to spend less time in their cars commuting to work and more time having fun in major cities. Cost of gas and congestion on freeways are factors and people are moving toward multifamily apartments and condominiums to avoid driving.
This movement has escalated because cities and towns have taken more steps to attract small and medium businesses. These are part of the creative class economy and the 2nd technology wave. People and companies have found that innovation is a social and collaborative process, so businesses want different kinds of office space that are open and offer in natural light. Gone are those large blocks of cubicles in an office park, as desirable office space mixes private and collaborative space, with worker amenities onsite.
Innovative technology driven companies have not only changed the inside of the office, but done so with flair. Most areas that attract the very best small and medium businesses have a dynamic mix of uses with retail space around where people work, plus living space nearby. The whole conglomeration is a mix of new and older buildings, with transit, street life and public spaces. Drivable suburban environments shift to urban where people can walk more than drive.
As technology advances, think about your own bank. Do you have a drive up ATM only or do you also have one for the person on foot or on bicycle. To improve, constantly challenge your bank's future plans in context of this changing environment.