5 Ways Banks and Credit Unions Misread Consumers Today

While hot topics like disruption, innovation and personalization dominate banking discussions, financial marketers say other critical issues that they should be talking about lurk beneath the surface, unmentioned. These matters rate serious discussions before they blossom into tomorrow's major challenges.

Financial marketers can easily tick off the A-list issues they’re wrestling with. But what’s out there that many bank and credit union leaders aren’t discussing?

We asked attendees of The Financial Brand Forum what subjects aren’t getting enough attention. The range of issues raised was quite varied, but especially interesting was how deeply some executives feel about these issues.

Issue 1: ‘Are We Truly Consumer Champions?’

One of the most sobering comments came from Curt Queyrouze, President at TAB Bank.

“I think the banking industry is too full of hubris,” says Queyrouze. As a result, the industry is not very good at self-awareness. “We champion ourselves as great community players and stewards of financial security, but, in reality, we don’t work all that hard at helping our customers succeed.”

In fact, Queyrouze feels that the banking industry has at times profited when consumers went wrong. Overdrafts are one example. He says the cost of processing overdrafts fell drastically for the industry years ago, but the fees charged for overdrawing accounts continued to rise.

By contrast, says Queyrouze, “there are a ton of fintechs that are working very hard to serve our constituents with a much better customer experience and outcome. We need to pivot to truly help our customers succeed.”

Issue 2: Millennials Are Not Always Embraced

For the industry execs who agree with Queyrouze, and see the need for a reset, the Millennial segment would be a good place to start.

David Finkelstein, Director of Marketing at Bank of Colorado, says many financial institution executives see this generation through a badly dated lens, which has not helped to serve them nor to keep traditional financial institutions competitive with newcomers vying for their business.

“Sometimes there’s not enough emphasis or credibility given to the Millennial consumer that all financial marketers desire to attract,” says Finkelstein. “I often hear people talk about them as if they were their irresponsible teenager at home, asking for an allowance, instead of what they are: mid-to-late 30s, college-educated individuals that represent the largest under-banked population in the country.” They want mortgages to buy homes and want to launch small businesses. Massive student debt frequently stands in the way.

Finkelstein sees these Americans as a generation that is too often written off instead of empathized with.

“This only adds to Millennials’ distrust of traditional banks,” says Finkelstein. “This gives them more of a reason to flock to the digital-first experiences that Fintechs offer. They speak the same language and offer support instead of pushing Millennials away.”

A way to reach out to this generation in a more positive way would be targeted financial literacy training and debt management advice, suggests Andrea Engle, Vice President, Tradesmen Community Credit Union, Des Moines.

Heritage Bank’s Shaun Carson, Vice President and Marketing Manager, says that terminology used by most traditional institutions increasingly does not match the way that many consumers do their banking.

“Younger consumers don’t even know what a checking account is,” he says “To them it is really a payment account.”

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Issue 3: Rural and Low-Tech Consumers Have Needs Too

More broadly, concern was expressed for accessibility to quality financial products in rural and diverse communities, by Tim McAdow, Vice President, CUNA Mutual Group.

“We believe that a brighter financial future should be accessible to everyone,” says McAdow. “That means delivering innovative, reliable solutions and experiences that enable more people in more ways to make financial decisions that work for them.”

In a related sense, Bank of Colorado’s Finkelstein fears that sometimes people in non-metro markets are not receiving much attention from financial marketers, especially those who are not fintech early adopters.

“Most people attending The Financial Brand Forum use mobile banking, mobile deposit, and peer-to-peer payments,” says Finkelstein, “but we’re not a good scientific subset of one of the largest demographics out there.”

Finkelstein thinks that in their zeal to digitize, financial executives must be careful not to leave those not interested in digitized services behind. He says that some consumers are plain terrified of technology. But they still need banking services.

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Issue 4: Is Your Brand Giving You an Edge?

Sean Keathley, President and CEO of the Adrenaline agency, in Atlanta, thinks that competitive pressure has distracted financial institutions from the key marketing mission of developing, nurturing, and maintaining an overarching brand strategy. This is a major error, he insists, because it’s what the institution has going for it the most.

“Brand credibility and reputation are absolutely critical both to create differentiation and to be authentic,” says Keathley. “Let’s be honest, banking isn’t really known for its expertise in brand marketing and creating a compelling brand narrative or story. Without it, that’s going to make it hard for them to be set up for future success.”

That would include attracting and retaining the type of talent that they’re going to need for the more consultative, bespoke and branded environment Keathley notes. “Realistically if bank brands are flat and uninspiring, they are not going to be able to build a next generation workforce.”

Underscoring this point is advice that The Forum 2019 keynote speaker Gary Vaynerchuk gave attendees: You are in a commodity business, so the main thing you have going for your bank or credit union is its brand.

All eyes in financial marketing will be on the naming and rebranding to come as BB&T and SunTrust consummate their proposed merger, according to John Oxford, Director of Marketing at Renasant Bank. Oxford thinks that the merging giants’ decisions will wind up setting the tone for other institutions.

At present many traditional banking players have brands with little equity in them. The plethora of sound-alike banking names removes brandvalue from many organizations, which has been amplified as the internet increasingly renders geography irrelevant, changing the meaning of “community.”

Further, many institutions’ same-old, plain-old names may actually wind up giving support to other brands. Josh Mabus, President at the Mabus Agency, tells a story about two banks in a market area of about five counties that both had “Peoples” in their names. As it turned out, one was the leading brand and the other came in around the tenth spot. Mabus says the stronger promotions that #10 put out actually benefited the leading brand — consumers just assumed the more successful organization was doing the advertising.

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Issue 5: Social Media Toe Dipping Doesn’t Accomplish Much

“Social media is the most overlooked medium of advertising by the financial industry,” says Oxford. “Most financial institutions still see it as a defense item to combat complaints and post when they are closed for the holidays. The financial services industry still struggles when compared to many other brands.”

Oxford thinks this is due to “lack of creativity, fear of market sensitivity, fear of compliance and mature boards.”

Oxford predicts that the winners in tomorrow’s advertising space “will have built a dynamic social community, which includes opted-in email, blog and podcast subscribers as well as the big five social platforms(Instagram, Facebook, LinkedIn, Snapchat and Twitter).

“Once you have an engaged community,’ says Oxford, “you can then use them to grow wallet share, refer business, and be ambassadors for your brand through engagement.”

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