Law firm virtual banking
During a discussion amongst law firm chief financial officers that I moderated for the American Bar Association, one of the best practices mentioned was the use of check scanners. Coincidentally, not more than 7 weeks after that event, my bank installed a check scanner into my office.
It is a remarkable instrument that further reduces the bank float from your clients and gives you almost immediate access to "good funds." No more waiting for the "check to clear" or other excuse for delaying your use of funds.
At first, I was concerned because I don’t want on-line banking. I’m very much afraid of security breaches. The bank may have a very tight security system and firewall. But, I fear that my system wouldn’t compare in its security, thus allowing hackers to enter my system, get the access information needed and then enter the bank’s system as though taking a mere "walk in the park." Voila! There goes our funds and our security. No thank you.
Then, I succumbed when I realized that we could do the scanning without allowing the outside world into our banking connection; in other words, we don’t have on-line banking, only a mechanism to make virtual deposits to our bank accounts without physically going to the bank.
There are benefits:
- There is almost an immediate access to funds (the next business day after the deposit is made)
- Deposits can be made 365/24/7; the "teller" never closes on our end
- We can do our banking when we want, not when the bank doors are open
- No deposit slips need to be completed, thus saving our labor, our time … and paper
- It’s neat — another electronic toy to play with
There are challenges. As my wife is fond of saying, "there is no free lunch." Thus, I see the following challenges:
- Paper trails are good. Electronic trails may be more difficult to trace should there be a future need to do so.
- Reconciling bank accounts, without a paper trail, may become more important.
- There is no reason to go to the bank now. That means I won’t be able to maintain a personal relationship with the bank personnel without making a real and asserted effort on my part.
- Since banking is a personal relationship-driven business, if I want to borrow money or avail myself of other bank services, I need to know someone at the bank. Otherwise, I’m just like any other numbered customer … and the bank will have no reason to go out of its way to help me achieve my goals
- Borrowing money, use of trust account services and other benefits offered by banks become higher priced when there is no personal connection or reason to bestow benefits onto a customer.
This technology, like all technology, will force a change in the relationship between provider and client. It remains to be seen what that change will be or who will benefit more from that change. I’ll be watching with an interested eye.Tags: Cash Flow - Finances, Management, Technology