Podcast 2: Thinking outside the vault Time to rise up
Community banks and credit unions currently hold just 20% of market share. It’s time to change that. Hear insights from our Executive Strategist, Jessica Webb, on how you can innovate and take back banking.
0:35We don’t know what we don’t know – Institutions know things are changing, but often it is not knowing how to reach out that stops movement. Staying where you are is comfortable. The reality is that the world is moving, so if you are “staying still,” then you are actively losing.
2:30No need to change – Many institutions don’t believe that they can change enough to compete for millennials or against the megabanks. The idea of changing from fees to a revenue stream that is positive from a consumer perspective feels foreign.
3:28Who is your competition? – Community institutions have 20% market share, but that wasn’t always the case. Competing with other community institutions is fighting within that 20%, but growth and success comes from taking from that 80% share megabanks control. Why fight over a slice when you can go after more of the pie?
4:04I want what everyone else has – Millennials are digital natives, but not androids. They don’t want a generic solution. They want a personalized and tailored solution and companies use of data has taught them that they can have it. Think recommended shows on Netflix.
5:05Knowing vs. acting – The worst strategy is inaction. Many of us have a fear of change. The idea of “it’s okay to not change” is strong in our industry because it was true for years and years.
7:37Gen Z and millennials – Both of these generations respond very strongly to brands they identify with. In fact, many millennials and Gen Zers use their purchases to build their personal brand. What they buy, or like, communicates a message about who they are. Community financial institutions have to work, not only to get their name out there, but to have their brand stand for something.
8:40Socially networked – Gen Z seeks out 5 to 7 user recommendations before they purchase anything. It sounds like a lot, but Facebook has built this tool into their platform. Amazon allows you to scroll to the bottom of the page and see hundreds of reviews. If you aren’t engaging with consumers on these platforms, you are missing out on important organic brand recognition.
11:06Local lettuce – Institutions that are able to bake a preference for local into their brand have been very successful. We’re not talking about sponsoring little league baseball, but targeting interest groups, like Women & Business organizations. Every community bank has a “We take care of our people” slogan written on their wall, but they have to go out there and live it.
12:50Out of sight, out of mind – As the use of cash declines, people are thinking of their bank less often. Institutions need to find ways to be seen. Institutions used to believe that ATMs were a great way to remind the community of their brand. Consumer belief is shifting where ATMs aren’t seen as a convenience, but table stakes. This increases the importance of institutions finding positive ways to appear in people’s everyday life.
16:20Service – What “good service” means is changing. Other industries are shaping how consumers think of “good service” and the current definition is, “Are you meeting me where and when I need you?” In finance, that often means having a presence on the consumer’s phone and being accessible through a multitude of channels (phone, web, email, social). Service is about advice and partnership. Fortunately, that is where community institutions shine, but they need to get that perception out there.
17:53Anything worth doing is worth doing poorly. – It seems counterintuitive, but in today’s age, delayed perfection isn’t as good as getting started. There is a perception that doing something new will be expensive and there is uncertainty about if there will be a payoff. Change is hard, but not embracing it only puts you further behind the curve.
21:00Underrated opportunities – The brand. Consumers resonate with certain words, good or bad, but this could be huge for community institutions. The key is to be where people are complaining and to be there loudly. When you see someone complaining on social media, step up and step in to provide help. Your engagement with one comment will be seen and valued by hundreds of friends.