With the banking industry becoming more and more digital by the day, it’s logical that banks and credit unions are shuttering physical locations. But there are still many consumers and businesses that depend on their local branch — people desperate to be heard above the din of the digital banking revolution.
Consumers angry about branch closures will look for any venue where they can express their displeasure. If the local press picks up the story (as they often do), a flood of comments — nearly all in dissent — quickly pours in. Others will turn to social media platforms like Facebook, Twitter and Yelp! to vent, protest, plead, beg and beseech you to change your mind.
The Financial Brand scoured the internet to find the most common complaints you can expect to hear when announcing plans to shut down physical branches. Here’s what we found, so your PR team can be prepared.
Objection #1: ‘Banking Should Be Personal’
Few topics are as intimate, intimidating and important to people as money. That’s why many consumers like the idea that they can discuss their financial issues with a real, live human. In this Digital Age — dominated by automated phone trees, call centers (often located in other continents), self-service technologies, and impersonal robots — consumers still like being able to walk into a branch and talk to a service rep.
This is a real concern for consumers. For the last 20 years, they’ve witnessed a decline in the number of service and support channels available in other industries, along with a perceived degradation in the quality of service and support they receive. Have a problem with your cable provider? Good luck… Want to talk to a Google support specialist? Forget about it… If you’re lucky enough to talk to someone, you still may never get your problem resolved.
Financial institutions understand this, which is why so many wrap their brands with an emphasis on how they make banking “personal.” Take a look at The Financial Brand’s massive database of banking taglines, and you’ll find slogans like these:
- Refreshingly personal.
- Personal Banking at It’s Best
- Service with a Personal Touch
- With us, it’s personal
- The Bank of Personal Service
- We’re making banking personal again.
While consumers may get to the point where they are comfortable discussing their most intimate issues (e.g., money, health) remotely, we aren’t there yet. That’s why people like going to their local branch to chat with their favorite teller. They want someone they can deal with eye-to-eye, someone who can’t evade their questions.
“I’ve been going to this branch for years,” one disgruntled customer complained upon hearing that the location would be shuttered. “The staff there were terrific. They were wonderful. They knew you by name, and made you feel comfortable. This is important when dealing with money.”
What they are really saying is that it’s comforting to see familiar faces — people you trust. A warm greeting and friendly banter puts consumers at ease, and makes them feel like their business is both important and appreciated.
And for all the talk about “personalizing the experience” in banking, you’d think more financial institutions would be sensitive to the role real faces in physical spaces can play. There is nothing more “personal” than the interaction between two people who know each other by name — something data-driven AIs might never be able to match.
Objection #2: ‘Aren’t You Supposed to Be “The Local Bank”?’
For decades, financial institutions have touted their connection to local communities. They understand the personal, intimate nature of financial matters, so they’ve invested millions of dollars into building brands that emphasize how “local” they are.
Look at these taglines real banks and credit unions are using to position their brands:
- Local People. Local Decisions.
- Bank smart. Bank local.
- Passionately Local Banking
- The neighborhood bank you can count on.
- Your family. Your neighborhood. Your bank.
What do you think will happen if these institutions want to close branches? People are going to blister them with accusations of hypocrisy and indifference towards their community.
Indeed, angry comments like those made by Trayce Whitfield, a city councilor for the town of Springfield, are common. “For over 40 years, the residents of Mason Square have banked at this location,” Whitfield said after TD announced it would close its branch in the Springfield neighborhood. “TD Bank says they are a good neighborhood bank. If that is true, then they should have a branch in our neighborhood.” (After considering feedback from the community, TD Bank decided to keep that branch open, according to a company spokesperson.)
If your financial institution plans to aggressively shrink its branch footprint, ratchet down the “we’re local” language in your marketing. It’s hard to convince people you “support the community” when you’re pulling out of those communities.
Look online and you’ll find many angry commentors explaining how a branch closure will impact their broader community. There are neighborhoods with small pockets of commercial activity that depend on foot traffic that branches generate. Plus there are the jobs lost inside the branch itself. Rural communities are especially hard hit.
“When you close this branch, you’ll be putting people out of work and killing our community,” one bank customer explained. “We’re a small town. Where are the bank’s employees going to work now? What about the businesses next door? The heart of our city is dying, and now we’ll have nowhere to do our banking.”
Objection #3: ‘But My Business Handles Cash’
The rapid pace of branch closures presents some very real and tough challenges for small businesses. Despite the rise of digital payment solutions, many still deal heavily in cash and checks, and need access to over-the-counter banking facilities on a regular basis. Restaurants, convenience stores, laundromats, parking garages, vending machine operators, and (more recently) marijuana dispensaries will all be wondering what to do when their local branch closes.
“We open early in the morning and close late at night,” complained one business owner who learned that their local bank branch would be closing. “We need to be able to get to the bank to deposit cash.”
Brandie Garrigan, a manager of a small diner in Allenstown, N.H., said she depends on her local branch to make deposits. But when that location closes — as the bank has announced — the next nearest branch will be a half hour away by car. Not an option for Garrigan, who doesn’t drive. And then there is also the diner’s waitstaff to consider, with hundreds of dollars in tips that need to be deposited every week.
It is entirely possible to disintermediate branches from the banking supply chain. But it’s going to take a while, because we first need to eliminate all the physical instruments from consumers’ financial lives — checks, cash and coins, physical signatures, and debit cards.
With KYC requirements and digital account opening still a struggle, how are financial institutions going to check IDs and get those signatures for new accounts in a world without branches?
Objection #4: ‘You Are Unfairly Punishing the Elderly’
Older consumers are frequently among those most frustrated with branch closures. Many of them have banked at the same branch for 30+ years, often keeping their accounts at the same location despite mergers and name changes. They have a good relationship with branch staff, and for some a trip to the bank affords a rare opportunity to socialize. It’s a familiar habit that most are reluctant to give up.
Financial institutions closing branches love to talk about all the other ways people can manage their accounts. But many older consumers aren’t comfortable with alternative delivery channels. They find banking by phone — both mobile banking apps and automated voice systems — confusing or overwhelming.
Telling older consumers there is another branch in the next town over isn’t likely to work either. When a bank in London announced it would be closing branches, one man went online to explain how his father and step-mother — both in their 80s — have mobility problems, so longer drives are out of the question. And that assumes the elderly have a car and a driver’s license (which they often don’t).
“If banks continue to close local branches, then they’re going to have to provide a home visiting service for older people,” he commented.
Objection #5: ‘You Are Guilty of Racial Discrimination’
Branch closings occur more frequently in Black and Hispanic communities. The top 10% of affluent communities in the United States have more than double the number of brick-and-mortar branches than those of the 10% most disadvantaged areas. If this wasn’t a problem, there wouldn’t be a need for the Community Reinvestment Act.
The CEO of the National Community Reinvestment Coalition, Jesse Van Tol, highlights how branch closures affect low-income areas. “The impact of these closures is severe,” Van Tol explains. “Especially on lower-income urban communities where few branches exist.”
Politicians everywhere are particularly sensitive to the repercussions branch closures have on consumers and small businesses in disadvantaged areas. They fear that shuttered banks will exacerbate conditions that are already precarious, creating a downward spiral. Many minority and low-income communities are becoming commercial “deserts,” with no grocery stores or banks for miles in any direction.
Whether true or not, banking providers may be accused of targeting branch shutdowns in minority areas. When TD Bank announced it would be closing branches in Massachusetts, State Rep. Bud Williams held press conferences to point out how the decision would be a disservice to communities of color that would have to travel for miles to find a full-service branch.
And after U.S. Bank announced it would be shutting down a branch in Texas, a group of protestors showed up to demonstrate. One woman carried a stack of petitions while another protestor yelled U.S. Bank’s decision was “pure and simply racist!”
Fair or not, closing branches in predominately ethnic neighborhoods will result in accusations of racial discrimination. When rationalizing branch networks, double check to ensure all communities are being accommodated equally.
Strategies to Mitigate the Backlash
Whenever financial institutions announce branch closings, the press release reads the same way every time: “People are using branches less frequently… blah blah… You can still access us with online banking or our mobile app… blah blah… And you can still bank with us in person at our other branches” (that are miles away).
The language is rote, the rationale boilerplate. Yes, branch traffic is down, and yes, that’s because more people are banking digitally. Yes, there are digital delivery options. And yes, you aren’t closing every branch (yet). But no, these arguments won’t persuade anyone who views the closure of their branch as detrimental. You have to go deeper and do more if you truly want to convince branch users that you give a rip.
Of course banks and credit unions need to close the doors on branches that aren’t cost-effective. But, before you make any announcements, anticipate people’s objections and think about how you might be able to address their concerns.
What can you do to avoid looking like a greedy, self-serving corporation simply cutting costs to improve its bottom line? Can you provide drive-through video banking kiosks, perhaps with ultra-secure night drops for businesses dealing with a high volume of cash and checks? How can you support the elderly who want to bank in person but can’t drive miles to another branch?
Try This Idea:
Create a special, dedicated space online to intercept grievances. Give people an outlet where they can express their feelings and contact you directly with complaints. You want to let them vent before they get to social media.
As your financial institution maps out its brick-and-mortar roadmap, look closely at how communities will be affected and how to dampen the impact. In the end, it could protect your brand, spare your C-suite a ton of headaches, and save your PR team from a world of nightmares.
In the end, you have to concede that no matter what you do and how thoroughly you prepare, some consumers will still lash out at you. But with thoughtful preparation and some creative innovations, you can seriously minimize the blowback.