8April 2016In My OpinionDEATH OF THE BRANCH? ONLY IF WE RISK-ASSESS THEM TO OBLIVION By Scott McGillivray, EVP & CIO, Pacific Continental BankIam going to ask you to play a game with me. More of a thought experiment, actually. I cannot promise it will be fun, and I am not sure every reader is going to get the same result, but that is what makes this game so interesting. Ready?OK, here goes: Pretend you receive an email from one of your peers to attend a vendor presentation for a new, revolutionary technology that is going to change the way branch banking works, and you can get in on it way before your competition. Everybody is excited about it, and now you are interested too.Here is where I am going to ask you to use your imagination: The technology I am proposing here was actually invented in the mid-19th century, but let us pretend instead that it was just invented by some sexy fintech in Seattle. None of your competitors has it yet, and it is considered a major evolution in branch banking.What is this magical product? The pneumatic tube. Apparently, those crazy folks in Seattle invented a way for you to double (or triple!) the number of concurrent drive-through customers by sending paperwork and money back and forth between a teller in the bank and a customer sitting in her car outside, via a plastic tube. Suddenly, one teller can serve more than one drive-through customer at a time! The investment in infrastructure is tiny, compared to the way you would have to add that capacity with your current methods. And after you have seen your money riding through a tube inside a smaller tube, you can't imagine how you wouldn't benefit from the cool factor of having this amazing capability. It is a no-brainer.Not so fast, chief. You are required, by policy and regulation, to conduct proper due diligence and a risk assessment on any new vendor or technology your company acquires. You have an RFP process. There are legal concerns. You need to get three competing bids and research the financial stability of the vendor. There are plenty of other factors you need to include in your decision-making.So here you are, in your own financial institution, and my question to you is this: If this brand new technology landed on your desk today, would it be approved? Think about your current process for evaluating and acquiring new technology, and answer honestly.I strongly suspect that your answer lines up pretty well with mine. While those of us living in this universe would not give this technology a second thought, our alternate-universe counterparts have a tough hill to climb. There is nobody else making these tubes, because they are brand new, so you are not going to get competitive bids. Then there are financial reviews, reference checks, regulatory
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