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Electronic banking gains popularity

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By Leslie Moore

 

Having instant access to nearly everything from the Internet to food to entertainment has led to the near-extinction of one-time-staples such as encyclopedias and pumpkin pies made from actual pumpkins.

And with the introduction of bank services like direct deposit, debit cards and online banking, paper checks may soon experience the same fate.

According to Taylor County Bank President Henry Lee, services like direct deposit and electronic banking are quick and convenient, especially for people whose work schedules make it difficult to come to the bank during regular business hours.

"I don't know that we will ever completely do away with paper checks, but it is going to get harder and harder to find somebody that will take a check," Lee said.

Andrew Miller, director of marketing at Forcht Bank, said people are becoming accustomed to instant gratification from other services and have come to expect that same treatment from banks.

"Instead of waiting three days to get your statement in the mail, you can have it sent to you in an email and go in and check it immediately," Miller said. "Online banking, you deposit money, you can see it instantly."

Roger Meadows, vice president and chief operations officer at United Citizens Bank, said direct deposit leaves less room for human error because tellers can make a mistake when entering information and checks also have to be run through a machine. Direct deposit, on the other hand, is all done electronically.

"The advantage to the customer certainly is quicker availability of their funds," Meadows said. "If they have a direct deposit in their account, if they get paid on Friday, their money is there to use on Friday morning."

Fort Knox Federal Credit Union Vice President Michael Bateman said direct deposit has three main advantages over the paper check - it's easier, less expensive and more secure.

"Overall, the trend in the entire industry is that the use of checks has steadily gone down over the last few years," Bateman said. "A number of employers have gone to direct deposit."

According to Leroy Bratcher, senior banking officer and vice president at Forcht Bank, it is less of an expense to the bank if a customer uses a debit card versus a check, which has to be processed. Bratcher said his bank has begun encouraging customers to get monthly statements by email because it saves paper, printing costs and postage and handling.

"We have a lot of customers who prefer that and like that," Bratcher said. "A gentleman came in not long ago and asked 'Do you do that? That's what I want.' And he was a long-haul trucker. He couldn't check his mailbox everyday."

While some people still prefer writing checks and insist on bringing their paychecks to the bank, Lee said senior adults will have to get better acquainted with services like direct deposit. On March 1, a government mandate requires all Social Security recipients to have signed up for direct deposit or they will receive their Social Security funds in the mail on pre-loaded Direct Express Debit MasterCards.

"People my age are a lot more hesitant about electronic banking and using direct deposit, and I think it's a generational thing," Lee said. "I attended a seminar and we were discussing how people put something that has valuable information on it in the mailbox and raise the flag up. That's just like saying, 'Come get it.' And people don't think about it."

Mary Lou Young, a disability advocate for Young & Associates, has 32 years of experience working with people who receive Social Security benefits. She said she started encouraging her clients to have their checks direct deposited long before the government mandate. 

"It's so much safer for their payments to be direct deposited," Young said. "I encourage people to have their benefits go direct deposit because of mail problems."

Young said that so far, she has seen no resistance and most people are open to direct deposit.

Amy Burton, a disability representative for Burton Disability Advocates, says she agrees that the mandate is a good idea. She said some of her older clients have been somewhat resistant, but she believes they will come around.

"Once they get accustomed to it, I think they will enjoy doing it that way," Burton said. "There are still some hold-outs, but everyone is aware that that's coming."

Young and Burton said that banks have been very helpful with helping Social Security recipients sign up for direct deposit. For a few, it is the first time they have ever had a real bank account.

"Basically, what we're going to do is go through a training process with all of our front-line staff, our tellers and personal bankers and make sure everybody is well-trained on the Go-Direct campaign so they can easily communicate to those people receiving those checks and just kind of walk them through the steps," Miller said.

Taylor County resident Robert Oldham has received Social Security payments via direct deposit for 23 years and has never experienced any problems.

"I do prefer to write checks, and have never had anybody to refuse my check," Oldham said. "If they do, I'll say 'thank you' and go somewhere else."

Ricky Sparkman, regional president of Community Trust Bank, said that while electronic banking services certainly offer a lot of advantages for both customers and banks, there is potential for some drawbacks.

"I think the disadvantage to the online banking is that we do not have the customer contact," Sparkman said. "There's always more opportunities to sell more services when we get them inside than when they're at the computer."

Bratcher agrees and said banks are in the relationship business and are used to having face time with customers pretty regularly, such as when they come in to make a withdrawal or make a mortgage payment.

"It would be easy to say we're not going to be able to keep a good relationship with our customers," Bratcher said, "but some of the younger generation, you can keep relationships with electronically through texting and Facebook, so we're going to have to juggle that and make this transition."

Bateman said although he has seen a steady increase in debit card usage over the last decade, in smaller communities like Campbellsville, many people still prefer to write checks.

"I've been in banking since 1976," he said, "and I've heard several stories about the check going away, but I don't think it will happen in my lifetime."