Issue link: https://nebusinessmedia.uberflip.com/i/1452735
16 Worcester Business Journal | February 21, 2022 | wbjournal.com F O C U S B A N K I N G & F I N A N C E BY SUSAN SHALHOUB Special to WBJ A sk any group at a restaurant needing to split a bill, and they'll tell you: Banking innovations such as Zelle make so life much easier. As a society, we love convenience, so it stands to reason we're wooed by the ability to manage our accounts with banking apps – instantly depositing checks and seeing our balances in real time. "Venmo is instantly trackable and people don't have to carry cash," said Peter Alden, president and CEO of Bay State Bank in Worcester. Life for cash Even as online banking and cashless transactions took a leap forward in the pandemic, Central Mass. banking sees continued life for paper currency Like Zelle, it's one of the popular person-to-person payment methods. It's rare to see a person in line ahead of you at the grocery store pull out a $50 bill and have the cashier count out their change anymore. The COVID factor Electronic banking was already gaining traction when it grew in popularity during the COVID-19 pandemic, said Kathleen Murphy, president and CEO of the Massachusetts Bankers Association. She points to statistics from the American Bankers Association showing that before the pandemic, 33% of bank customers in the U.S. used apps to manage their bank accounts, with 24% doing so online, and 21% in person at a bank branch, in person. During the pandemic, digital channel use grew (44% mobile app; 26% online); while branch banking saw a 10-percentage point drop. Fewer folks visiting branches made sense from a health standpoint in light of COVID, of course, in terms of social distancing. But Cornerstone Bank's Al Ahmed, senior vice president of retail, said as customers figured out exactly how COVID spread, many people didn't want to touch actual money itself, either. "We had more and more customers sign up to use Apple Pay or Google Pay because it was just a more hygienic way of doing business," Ahmed said. With all factors considered, are we headed toward a totally electronic banking industry, where coins and paper money are a thing of the past? It seems the answer would be yes, but Central Massachusetts banking leaders say no. Cash is king (or at least, queen) Even with more electronic ways to bank, more people doing so, and the pandemic prodding even more (perhaps initially reluctant) banking customers to download apps or hop online, bank Al Ahmed, senior vice president, Corner- stone Bank Massachusetts banking market share Size of institution Number of % market (in assets) institutions share Less than $100M 2 2% $100M to $250M 12 11% $250M to $1B 44 41% $1B to $10B 45 42% More than $10B 4 4% Source: Federal Deposit Insurance Corp. Kathleen Murphy, CEO, Mass. Bankers Association IMAGE/ADOBESTOCK.COM