For the average consumer, banking is a chore akin to scrubbing the toilet. It’s something that has to be done whether one likes it or not, and most people don’t. There are a million things we’d rather be doing.

People detest banking because it’s rife with complex nastiness like math, numbers, fractions percentages, forms, queuing, waiting and bureaucracy. Consumers are concerned more with how they spend their time than their money, so they think about banking as little as possible. “It’s boring. I’m busy.”

The consumer view of money is actually very straightforward. People either have money or need some.

HOW CONSUMERS VIEW BANKING
It seems pretty simple and obvious, but have you ever looked at banking this way?

Most bankers are incapable of translating financial services from this consumer perspective. They typically only see the industry through the lens of ROI, risk analyses, legal disclosures, regulatory issues and compliance concerns. Some bankers like the fact that it’s confusing, while a few deliberately exploit banking’s complexities for profit.

Marketers sensitive to these realities see an opportunity — quite literally a “simple” solution. They know that making banking easier is something that would really resonate with the vast majority of consumers who would rather be doing something (anything!) else. It’s an intuitive conclusion, and one that doesn’t require a deep data dive or tons of market research to validate.

Reality Check: Making banking easy ain’t easy.

If making banking easy was an easy thing to do, someone would have done it already. Yet surprisingly few financial firms have even attempted this direction. National City had been on a “simple” kick for a few years before being swallowed up by PNC. More recently we’ve seen Ally Bank, with its focus on transparency and its “Straightforward” slogan. And certainly PFM providers like Mint and Geezeo are doing what they can to improve one part of the overall banking experience. But no full-service financial institution has stepped up and dedicated itself 100% to the concept of making banking easy.

There’s been much buzz among thought leaders in the financial industry over BankSimple, a startup venture with plans to pursue the “easy banking” strategy. Albeit BankSimple will only handle transaction accounts, so the strategy should more aptly be called “easy checking.” What about loans, credit cards and other financial products?

The nascent company claims to have the solution that will conquer consumer apathy towards banking. The BankSimple motto: “Don’t suck.”

“By not sucking, we will win,” says Joshua Reich, a BankSimple founder, on the company’s blog.

Reality Check: There’s a lot more to making banking easy than simply “not sucking.”

Despite being somewhat vague about their offering, the guys at BankSimple are right about one thing: the financial marketplace is ripe for startup brands that challenge the status quo. It’s part of the anti-incumbent attitude running rampant in America.

Despite BankSimple’s optimism and idealistic ambitions, they will likely find that change — especially from within the industry — doesn’t come easy. Truly implementing an “easy banking” strategy is one of the hardest things a financial institution can attempt. For starters, when you make anything easier for someone else, that usually means you are making things more difficult for yourself. It’s a zero-sum equation where you shift the workload off their shoulders by taking on more of the burden yourself. This is a huge mental leap from the philosophical position financial institutions are operating from today: “We make more money when we do less. We want consumers to handle more for themselves, on their own.”

Reality Check: There’s an important difference between “easy” and “easier.” Many banks and credit unions that have ventured down the “easy” path turn back when they realize how many barriers, roadblocks and other SNAFUs are in the way. What they often choose to do instead is cherry-pick a select few items that can be simplified here and there, then sell the world on how they are “making banking easier.” It’s a cop out. Just because you chop some steps out of a couple of processes does not mean it’s easy to bank at your institution.

Financial marketers fantasize about creating simpler solutions while frequently underestimating the energy and effort it takes to achieve this dream. Reducing banking’s complexities consumes a lot of internal energy and resources, and innovating new processes takes time. For example, how long would it take your organization to completely overhaul all its forms? How can forms be shortened? What forms can be eliminated or combined with others? What forms should be online? Five committee meetings and six months later…

And that’s just the beginning. If you want to make banking easy, you have to look at the complete relationship. When viewed in aggregate, how much are you asking people to do — e.g., get a debit card, a credit card, enroll in online banking, mobile banking, sign up for e-statements, etc.? How much time does all that take? How many different employees, forms and touchpoints are involved?

But wait, there’s more:

• Processes – How hard is it to get a loan? Or open an account? Or enroll in online banking? How many steps does it take? Are there unnecessary policies or complex procedures interfering with efficiency? How long does it take? Where are consumers frustrated by bureaucratic baloney? What hoops do you make people jump through?
• Locations – Are your branches easy to find? Or are they in awkward locations, buried far from beaten paths? How accessible are your ATMs? Is it easy to get in and out of your parking lots? Once inside, do people intuitively know where to go and what to do?
• Online – How hard is it for consumers to find what they are looking for on your website? How far do they have to dig? How many clicks does it take? Is your site map counterintuitive? Is the interface confusing? Do you overwhelm visitors with links? Can people open accounts and apply for loans online? Can people ask you questions live online?
• Service Delivery – What could people do online that they can presently only do by making a trip to a branch? How many times is someone handed off before they get the information they need? If someone talks to three different people, will they get three different answers? What’s your automated phone system like?
• Products – Do you make it easy for consumers to compare products? Are your products easy to apply for and use? How much paperwork is involved? Can people easily access current account information via various channels?
• Choices – Do you offer too many? Are the differences clear? How do you make it easier for people to make the right decisions?
• Transparency – Are you upfront about how are your products structured? Are you honest, candid and straightforward? Are you clear about what the costs will be to each consumer? How complex are your disclosures? Do you bury conditions, or cloak them in confusing legalese?
• Image & Identity – What does your brand identity say about you? Does your logo, slogan, colors, etc., convey and reflect a “simple” way of doing business? Do you have multi-page brochures? Do you send new customers away with a folder full of printed materials?

These are merely cursory items on a partial list.

Bottom Line: Simple, easy banking is one of the financial industry’s Holy Grails. Just don’t be naïve about what engineering an “easy banking” experience entails. There is more to making banking easy than just making checking accounts marginally easier. If you really want to simplify banking, you must be prepared to retool everything. That means revamping your entire product lineup, your marketing, staff training, and probably even your core data processing system.

The following is a showcase of breakthrough RETAIL BRANCHES from the team at Brand Partners (now out of business).

M&T BANK – BRANDED ATM SURROUND  (BALTIMORE)
This multi-dimensional display incorporates a fresh, new brand identity into the branch. Sheets of acrylic in the brand’s colors layer over a white acrylic backlit shell. Two alcoves house a pair of ATMs. Notice how the use of metal and plastic finishes combine to create a more modern, high-tech impression.

ROCKY MOUNTAIN BANK – BRAND DISPLAY (MONTANA)
You don’t need a lot of fancy materials or complicated hardware to make a dramatic display. Sometimes all it takes is scale. The copy on the display says, “Great things happen when you dream big.” Various “wishes” float in the center: “4×4 Extended Cab Pick-Up,” “Starting Your Own Business,” College Education,” “Mountain Lodge Getaway.”

NATIONAL CITY – ENTRY ZONE (MILWAUKEE)
Giant window clings surround the ground floor level of this National City entrance.

NATIONAL CITY – WINDOW DISPLAY (CHICAGO)
This teaser display says, “On February 9, you can say ‘hello’ to a new way of banking.” Smart marketers make use of their retail window displays.

NATIONAL CITY – WINDOW DISPLAY (CLEVELAND)
Some operations people express concern about blocking windows with clings. “What if we’re robbed?” Surely, without window displays, you may be able to see what direction a robber flees. But you aren’t gaining much for the marketing sacrifice. Here, National City is promoting holiday gift cards, which also helps introduce a seasonal festive element to the branch.

UNIVERSITY CREDIT UNION – TRANSACTION ZONE (MAINE)
Floor and ceiling cues help define spaces. Hard surfaces are used in high-traffic areas, while carpeting is used in “dwell zones,” such as the lounge shown here. An ovular suspended ceiling element hovering over the checkwrite suggests the start of the queue. High ceilings create a more open and inviting feeling. Notice how the soffit behind the teller area is used for MERCHANDISING (dimensional lettering).

INTEGRA BANK – STOREFRONT (KENTUCKY)
If you have a lot of windows, you need to give a lot of consideration to how your branch looks from the outside. Does it look clean, simple, professional, inviting? Or does it look dated, conservative, cluttered, boring? The combination of lighting and a consistent application of the brand’s signature blue color creates a clean retail “storefront.”

BOFA – BRAND DISPLAY (NEW YORK)
Layers of suspended acrylic not only communicate messages about the BofA brand, the overall display looks like corporate art. It’s almost a sculpture.

SOVEREIGN BANK – BRANDED MERCHANDISING (BOSTON)
A combination of wood paneling, warm fixtures and a consistent application of the Sovereign color create a comfortable, moderately upscale environment.

SECURITY NATIONAL BANK – BRANCH INTERIOR (SIOUX FALLS)
Circular architectural elements help soften the stiff experience most consumers expect from financial institutions. This branch has a smooth, flowing floor plan that balances the need for both public and private spaces.

WEBSTER BANK – BRAND DISPLAY (CONNECTICUT)
This multi-part display tells Webster’s brand story and presents the bank’s core values. Brushed aluminum, vinyl lettering, dimensional lettering and an acrylic disc.

“If there’s anything that could dislodge a customer, a merger is it.”
– Anita Gentle Newcomb
Banking Consultant

Economic turmoil and the crisis in the financial industry has created an upheaval in deposits of epic proportions. Many financial institutions smell blood. But to others, the idea of trying to gain from a competitor’s downfall is a bit unsavory.

When WaMu got absorbed, BECU in Seattle chose not to take the fight head-on because they “didn’t want to be perceived as dancing on WaMu’s grave.”

Reality Check: In the war for deposits, there are no prisoners. You gotta go for the jugular. Snag every deposit dollar you can. No one will fault you for taking advantage of the situation.

Despite exercising some marketing reserve, things worked out well for BECU anyway. “Daily membership doubled since the severity of WaMu’s problems became known,” said a BECU spokesman. Things went “gangbusters.” But you have to wonder how much more BECU could have gained if it adopted a more assertive strategy?

Key Fact: When banks merge or get taken-over, they lose somewhere between 10 and 20 percent of their deposits within a year.

Here are some typical examples of the losses in deposits these banks saw within a year after their acquisition:

• Mercantile Safe Bank lost 12.5% of their deposits
• North Fork Bank lost 17.1% of their deposits
• Fleet Bank lost 19.7% of their deposits
• World Bank lost 26.1% of their deposits

Within an hour after the announcement that Wachovia had been forced to sell itself, the phones started ringing at local banks. Wachovia customers wanted to move their accounts.

Right now, about a third of all the deposits in the Washington D.C. area are changing hands due to mergers.

Billions and billions of dollars, just floating around…

“If there’s a lot of glitches in the transition, that dramatically increases the potential for customer defections,” Greg McBride, senior financial analyst for Bankrate.com, told the Pittsburgh Tribune-Review. “And competitors are happy to scoop up those customers.”

That’s why many banks started running ads attacking PNC’s takeover of National City the very next day after the merger closed. Two weeks later, some banks are stepping up their efforts. Now what does that tell you?

“2008 was difficult for us. Our competitors did take advantage of our situation.”
– Sam Schreiber, Wachovia

An aggressive strategy worked remarkably well for Sonabank, whose 9-month effort added $20 million in deposits — pulled straight from Wachovia. Not bad for a bank with only $400 million in assets.

The recent tsunami of mergers sweeping over the financial industry has triggered much discussion among industry experts about the best way to approach them.

Direct Mail - In an eBrief from CreditUnions.com, Ray Springsteen suggests sending targeted direct mail pieces within the immediate vicinity of the merging bank’s branches. It can’t hurt to tailor your message specifically to the situation. You might also want to think about sending a DM piece specifically to those existing customers or members who don’t have a deposit relationship with you already. The chances are reasonable that they could have deposits with the merging bank.

PR - Springsteen also recommends contacting the local news outlets. If you’re healthy, well-capitalized and making loans, tell them your side of the story. When journalists report about failed banks and mergers, they are frequently happy to report the flip side about other local financial institutions that aren’t struggling.

Staff Awareness - It’s critical all staff know which financial institutions are struggling or merging in your area. Tell them their ears should perk up when they hear someone mention these financial institutions. This is an easy opportunity for your staff to have a switching conversation. Sonabank gave employees weekly updates on the bank’s strength to help them persuade Wachovia customers to switch. “It used to be that loan officers and branch managers didn’t need to know our capital ratios,” a Sonabank representative said. “Now they do, and they spend time educating clients about it.”

Ads - One ad from Sandy Spring Bank read: “Another bank is about to change names. But as a customer you could be faced with more than just a new name – new account numbers, changes in personnel and higher fees. Why not change on your terms?

Conclusions

Key Takeaway: Your constituents expect you to do what’s best for the organization. You are obligated to capitalize on competitive opportunities as they present themselves.

Bottom Line: The unprecedented volume of mergers in the financial industry creates massive opportunities for financial institutions to grow deposits. But you have to act now. The window of opportunity closes quickly. If you don’t go after the deposits of failing banks you’re leaving a lot of money on the table.

Here are recent stories of interest from around the web.
Click on the hotlinked headlines to read more.

Who’s next to get gobbled up?

This guy forecasted the takeover of National City, and BINGO! He nailed it. Guess who else he picked? Keycorp and Fifth Third, although he also thinks Fifth Third might be in a position to take over Key Corp. If not Fifth Third, then US Bank. Maybe US Bank should swallow Fifth Third while Fifth Third is gobbling Keycorp. Sounds like the best way to maximize bailout subsidies.

575 branches get new TD signs

The original plan was to change the signs to “TD Commerce” following last year’s merger between TD Banknorth and Commerce. But due to unexpected trademark problems including a lawsuit from another Commerce Bank, the newlyweds had to scrap their plans and go with just plain old “TD.” At a cost of about $20,000 per branch, that’s about $11.5 million. Ouch! Now, what do about the signs on TD Banknorth Garden… There is a bright side to the story: The bank completed the sign swap on all 575 branches in only five days (October 31 – November 4).

Grade-A prime media placement

Arizona State CU had the only full page ad in the A-section of the Arizona Republic on election day. 22 pages in the A-section, and theirs was the only ad. It was on the back page. Paul Stull, the credit union’s VP/Mktg. said the paper sold out that day. How cool is that? (You can click on the ad to enlarge it.)

ATM network saves CU members $20 million

The Credit Union 24 ATM network says credit union members saved $20 million in fees so far this year by using its 50,000 surcharge-free ATMs nationwide. At an average fee of $1.50, that means there were 13 million ATM transactions, or an average of 266 transactions per ATM for the year (that’s about one transaction per ATM per day). Kudos to the Credit Union 24 network for not dinging members with fees. Now, can we maybe freshen up the logo a little?

The biggest collection of bank logos ever

This guy’s online collection of bank logos must be a real labor of love. He says he’s uploaded about half of the 5,000 bank logos he has on file. Unfortunately, the library only gets to “E” in its alphabetical listing before the HTML crashes. Doh, FAIL!

Here are recent stories of interest from around the web.
Click on the headlines to read the full story.

National City’s rivals planning feast

If you aren’t already full from heaping servings of fearful WaMu and Wachovia customers, grab a steak knife and dig into the next course being served at the failed-bank buffet: National City. PNC announced last week that they will be acquiring the struggling Cleveland-based bank. (Is it too late for National City to scrub its recently announced sponsorship of the Detroit Pistons next year?)

Get ready for a bigger Navy

Navy FCU, world’s largest and most formidable credit union, will more than double its number of branches in the next three years. It now has 161 branches in major Navy and Marine Corps hotspots, but will have 330 by 2012. (That requires a ton of capital.) Earlier this year, Navy FCU expanded its field of membership to include all branches of the military, and its branching plans are to court its new potential members. Navy Federal was growing rapidly even before it broadened its membership. It opened 34 new branches in 2007 and expects to open 21 this year.

Everyone will offer remote deposit by Christmas

Okay that’s an exaggeration, but is Celent’s latest report any more believable? They say 40% of all banks and credit unions will offer remote deposit capture by the end of 2008. That seems extremely optimistic, if not impossible.

Can you save money by spending?

Consumer Reports says no, despite all the hype. They took a look a look at BofA’s Keep the Change, Wachovia’s Way2Save, and One from American Express. The bottom line? People would do better with regular savings accounts and rewards programs tied to plastic products.

Bank in Mississippi says “konnichiha” (that’s Japanese for “hi”)

Toyota is moving Japanese employees to the town of Tupelo. Renasant Bank rolled out the welcome mat and ran some billboards that said “Welcome to Mississippi” in Japanese. The bank may be the first in Mississippi to incorporate Japan’s character alphabet into its advertising. Maybe Renasant should have been given a shot at offering the new Toyota Visa Rewards Card instead of US Bank.

San Diego sues WaMu for predatory lending

The city says WaMu the bank engaged in unlawful subprime mortgage lending practices. This isn’t the first lawsuit San Diego’s brought against a mortgage lender, and it isn’t going to be the last. The San Diego City Attorney’s office said his office will bring another lawsuit against an undisclosed home loan company this week.

Powder-laced letters mailed to Chase branches in 9 cities

More than 30 letters containing a suspicious powder were mailed to Chase bank branches and federal banking regulators’ offices in nine cities. The powder, it turns out, was calcium.