Retail financial institutions, such as banks, commercial lenders, brokers and credit unions, have been dealing with a perception problem since 2008. Many Americans did not like the Wall Street bailout, and most financial institutions were tarred with a rather broad brush. Whether fair or not, these institutions had to battle back to regain the positive views customers once held. Here are three strategies financial institutions use to boost their positive profiles and attract customers:
Backing a Social Cause
Embracing a social cause or charity is a great way to burnish whatever luster an institution possesses. When a business joins in with a popular cause, it should, at the margins, attract new customers who agree with that cause. There are a couple rules of thumb involving this strategy:
Selection: In today’s polarized society, it helps to pick a relatively non-controversial cause. For example, Fifth Third Bank, headquartered in Grand Rapids, MI, sponsors an official charity event each year. For 2017 it's a “Stand Up to Cancer” run, in which proceeds go to research teams around the world. Folks of every political stripe want to stamp out cancer, so participation can be broad. A potential customer who runs in a charity event is probably more likely to become an actual customer.
Marketing: An event-driven strategy is a good idea, because it involves the public and drives favorable news coverage. Marketing collateral, such as company T-shirts, reinforces the message. It is important to separate company advertising from cause promotion, because the company shouldn’t want to seem disingenuous. Social media should be fully exploited in addition to traditional outlets such as TV, radio and newsprint.
Offering Career Support Services
The unemployment rate is low, yet many people still seem to be unemployed or underemployed. Financial institutions have a stake in a strong employment economy, because the demand for financial services grows as more people earn paychecks. Certainly, any bank or other financial company that actually has job openings should publicize that fact on its website and other media. For example, Citizens Bank currently has 400 job opportunities all over the country, and devotes a chunk of its website to help folks identify and apply for employment. Job fairs are a traditional method for companies to publicize personnel needs. It’s also a plus to develop employee-friendly policies, including a range of career support services, to earn the respect of the general public.
Financial companies can go a step further by offering general support to job-seekers as they hunt down leads. For example, a credit union might sponsor a public job-search center equipped with desks, phones, computers, and to encourage bank employees (and retirees) to volunteer support at the center.
As community partners, financial companies can bring many resources to bear on the problem of unemployment. For example, a bank might sponsor a job-seeking support initiative that makes available free services for helping graduates transition from education to employment, or assists outbound employees find a new job. A financial institution might team up with a job-search business like Mentat that not only identifies jobs, but also rewrites customers’ resumes and automatically applies for suitable jobs on the customers’ behalf.
Improved Technology
Millennials make up the biggest consumer segment in the U.S., and they have high expectations regarding the use of technology for their banking and other financial services. In the last two years, mobile banking has gone from a nice-to-have feature to a necessity for many customers. Banks/credit unions that provide weak mobile banking options will have trouble attracting new accounts. Customers are looking for improved apps that provide traditional banking functions with other features. As an example of a successful app, Chase offers user-friendly mobile banking that includes person-to-person money transfer, mobile payments, check deposit, real-time alerts, viewing of transactions, balance and past statements, loyalty rewards and good security. In fact, security is probably the biggest concern customers have regarding the use of banking technology. Chase addresses this with 128-bit SSL encryption and multifactor authentication.
Another technology area that shows great promise for financial institutions is biometrics. Citigroup is actively pursuing a program to enable ATM secure access via retina scans. This could replace cards and PINs, making impersonation virtually impossible. Other types of biometrics, such as fingerprints and facial recognition, are already in use on items such as iPhones and computers. Financial institutions that fail to embrace the latest technological trends are risking their own demise.
©2017
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