Jeff Austin tells Liz French how this company is balancing the human element of customer service with state-of-the-art banking technology.

The notion that customer service is dead in the banking industry is not entirely unfounded, and it seems the larger the bank, the harder you have to fight to get your needs met. With 23 branches, Austin Bank has probably outgrown most people’s definition of a small, local bank, but according to Jeff Austin, vice chairman, the bank is just as customer-centric as it was when it opened its doors nearly 100 years ago.

“We may have more people than what some large Wall Street banks say is efficient, but we make up for that with our personal service and focus on relationships. We are a locally owned, family-run bank that makes local decisions, and that means a lot to our customers,” said Austin, a fourth-generation executive serving as vice chairman
at the Jacksonville, Texas financial institution.

Austin explained that Austin Bank was once comprised of six related bank entities, but in 1999, the company consolidated them under one holding company, Austin Bancorp. Since then, the bank has expanded and now includes three other affiliated banks: First State Bank in Frankston, Capital Bank in Houston, and First State Bank in Athens.

Jeff Austin

“While the industry has been undergoing a lot of mergers and consolidations, we didn’t want to branch out until we determined it was right for our customers and our employees. We wanted to make sure everyone was comfortable.” And they were. Customers looked forward to making deposits in neighboring towns while still receiving personal attention. “That helped steer us in the right direction.”

Balancing act
Recently, the company has been investing time, money, and resources in banking technology—not to limit interactions with customers, but to give them more choices. “Customers want to do their business quickly, but they still want to be spoken to. The human element is still important. That being said, customers are choosing to do more business electronically, and we have to fulfill both of those needs,” said Austin.

Although Austin Bank has improved its ATM services and telephone banking, the Internet is quickly becoming the preferred choice by customers, prompting the bank to distribute users across servers based on traffic and demand patterns. The task was difficult considering that Austin Bank’s service area, with the exception of a few large cities, is mostly rural, and the majority of customers rely on dial-up Internet service. But with the help of two KEMP LoadMaster 3620s, Austin Bank’s Web site can now handle 1 million concurrent sessions.

“We want to serve to the less technologically equipped areas just as well as we do the large cities,” said Austin. “Customers are accessing the Internet in a variety of ways, and we can serve them all.”

Not only has Austin Bank improved access to its Web site, it has also enhanced its capabilities. Customers have choices. For instance, customers no longer just see their statement online, but also images of their checks, and online bill pay is now a breeze. To encourage customers to use online bill pay more often, the bank has eliminated fees for the service. “We’ve been pushing the Internet for a few years,” Austin said, “and the efforts have been fruitful.” From September 2005 to September 2006, Austin Bank has seen a 45% to 50% increase in online banking.

Change from within
To maintain its local feel, Austin Bank is making several internal changes. About two years ago, it formed an inter-bank task force made up of executives from all four banks. These individuals are charged with creating efficiencies where possible by, for instance, employing the same vendors, auditors, and internal loan review team and participating in the same employee benefit plan. “We are a bottoms-up organization. The top makes final decisions, but we are always careful that our decisions are right for our customers and our employees,” Austin said.

When the inter-bank task force was kicked off, Austin Bank held a vendor summit to discuss how the bank could be a better business partner and provider of financial services. “It is great to say that we want to be efficient, but we need their help.” Deluxe Checks, a provider of checks and other products and services to individuals, small businesses, and financial institutions, is currently working with Austin Bank to improve the customer experience. It has initiated several surveys and road mapping techniques to determine customers’ needs and expectations. In addition, Vitex, Austin Bank’s technology consultant, is helping the company conduct work flow analysis, with results expected in early 2007.

Under the leadership of Cass Bettinger, who is heading up Austin Bank’s strategic planning sessions, Austin has incorporated many Q12 questions into a corporate culture survey specific to the institution, which allows management to listen to employee concerns anonymously. Employees scored the bank highly in its ethical culture and training programs, but cited employee recognition as an area in need of improvement. In response, the bank is initiating a formal process to evaluate and recognize employees based on their performance.

Soon after the formation of the inter-bank task force, Austin Bank created a business strategy task force whose job is to identify obstacles that stand in the way of good customer service. As a result, the company cross-trained employees to knock down silos, created some new positions to leverage its existing work force, and eliminated piles of paperwork.

“Sometimes, we are our own worst enemy—we demand documentation, but it is often unnecessary,” said Austin. “Improvements are much easier to make when they come from within.” With the business strategy task force in place, Austin Bank has grown its assets from $500 million to almost $800 million while adding only a few employees.

To continue down this growth path, Austin Bank will spend the next year enhancing programs to encourage loyalty from its existing customer base, which consists of a healthy mix of individuals, households, and small to medium-sized businesses. “We want to help our customers grow and thank them for their business.”