It’s no secret that consumers value convenience. In today’s world you can get a month’s supply of groceries, pick up your prescription and contact lenses, have your oil changed and arrange to have dinner dashed to your doorstep without leaving your car. In an ever-changing landscape where consumers are king and there is no shortage of options, it’s not enough for financial institutions to facilitate transactions and hope for the best.
Competition within the financial services industry has always been fierce, and for decades, the main contenders were other branches. While local, on-the-ground financial institutions are still in the competitive lineup, the field has broadened to include fintechs, which increasingly handle lending, cloud-based offerings, in-app payment alternatives and more.
To remain competitive, financial institutions have to identify what they do better than others and seek out every opportunity to communicate and invest in those differentiators. It requires a multifaceted, long-term approach, but it’s worth it. Here’s why:
We Could Learn a Thing or Two from ‘The Other Guys’
Fintechs have long been on the one-stop shop bandwagon, giving consumers what they want in easy-to-navigate ways. It’s time for traditional financial institutions that have felt threatened by fintechs to chart a new course. Institutions that are able to replicate what fintechs offer (or even partner with a fintech to provide more robust services to consumers) while also highlighting the unique attributes of their brand DNA can create a place and a community where consumers can truly have it all.
The secret sauce that fintechs can’t match on their own is community presence – the ‘it factor’ of relational and personal impact that builds confidence, trust and loyalty.
Financial institutions have spent too much time viewing fintechs as the enemy. Let’s give credit where it’s due: Fintech growth was born out of an unmet consumer need. Round one goes to fintechs; now, let’s learn from it and adjust our game plan.
A great place to start is revealing and maximizing where the financial institution should focus. This includes identifying what you offer that fintechs can’t, and pinpointing the fintech offerings you don’t currently have, but could realistically implement.
Turning the assumed “threat” of fintech into an opportunity is a smart play that requires a shift in strategy and quick action. The key is owning and celebrating a unique brand identity, capitalizing on the opportunity to showcase what makes you “you,” while evolving how to meet consumers’ needs.
Additional Resource: Find Your Strengths and Weaknesses vs. Fintechs
It’s Time to Shift the Culture of Banking
Identifying differentiators is the first step. While bottom-line historical key performance indicators may suggest that transactions should drive the branch, in practice, that is a short-sighted approach to a quick win. It’s time to own the differentiator that relationships drive growth, and maximize its impact.
What does this look like in real life? For starters, you are not the hero in your consumer’s story. They want to be their own heroes; what they need is a guide to help them along the way. Financial institutions must intentionally highlight consultative collaboration over transactional services and invest resources into the relational aspects of banking that are best done in-person while also meeting the day-to-day transactional needs of consumers in low friction, efficient ways.
Recognizing the need for a shift is great, but it stops there without an intentional activation plan. C&F Bank is one of the organizations we’ve seen manage this shift successfully. Instead of spinning their wheels staying the course of what has historically worked, they’ve pivoted to remain competitive, investing in tech and online solutions while also prioritizing engaging spaces designed for in-branch collaboration that can’t be replicated online.
What could activation of a culture shift look like for your institution? Here are three foundational steps to maximize differentiators to prepare for and power the change:
1. Dig deep to understand your audience: Whether entering new markets or overhauling existing branches, the industry has changed, and so have consumers. Before you can shift a culture to fit those you serve, you have to understand who they are, and what they want in order to maximize efforts to effect discernible change. Ideally, this understanding is powered by a tailored strategic market analysis that helps guide the balance of high impact with smart investments.
2. Shift and maximize your resources: A market analysis isn’t a formality that checks a box; it’s an active tool that guides everything that comes next, including where to invest resources to grow those relational banking aspects that make the branch experience so valuable. Again, this is where you pinpoint what you offer that the other guys don’t or can’t, and double down.
3. Walk the talk: It’s not enough to say relationships are driving the ship and build out a space that supports it. It requires an ongoing evaluation and activation of what matters most to your consumers, bringing together the best pieces of transactional and relational banking. This takes each customer on a personalized journey to deepen connections, while attracting new talent and clients to fuel growth.
Watch Now: How C&F Bank Prioritizes Relationships
We Should Be in the Business of Serving People, Not Selling Services
By positioning your organization as the guide in your consumer’s story, you’re investing in the future. When you make the ideological shift from transactions to relationships, people become the purpose.
In turn, this purpose gives perspective to every situation. Think beyond the services you directly provide and ask yourself: Where can we add value to prospects, even if it doesn’t immediately boost our bottom line?
Take a play from the one-stop shop book by providing extra value at every turn, ultimately giving consumers a reason to come back. They may not be opening an account or seeking a loan today, but when they are, odds are they’ll turn to you.
Here are three steps to serve consumer needs today, while creating long-lasting loyalty for tomorrow:
1. Acknowledge when you’re not the best fit: Your institution has a lot to offer, but you’re not always going to be the right choice. A great way to earn respect and trust is to be honest about stating when your organization is not the best fit to meet the consumer’s requests.
2. Go beyond the ‘no’: When you can’t directly help, take the extra step to connect them with someone who can. Proactively start building a referral network rooted in community, shared values and reciprocity. Cultivating partnerships with like-minded vendors to create a breadth of services is a win all around; you provide support to prospects and other local businesses, and ideally get some new business referrals in return, all while building a foundation of trust and service.
Start building your connection list through your own client roster. Referrals to someone you already have a professional relationship with allows you to maximize your time and impact as you invest in relationships for the long haul.
3. Give them reasons to come back: Even when you’re not the “today” answer, you have a captive audience to plant seeds of future value. For example, maybe the prospect is a college student who has inherited money in a trust, and needs guidance on how to proceed. You connect them with a trusts and estates law firm that you’ve built a referral relationship with, but before shaking hands as they head out the door, you take the opportunity to cast a vision for their financial future.
After graduation, that former student will be looking for a car, and eventually a home or small business loan. How can you begin the conversation today that will get a prospect back in the door when the need falls under your purview? Maybe it’s a savings toolkit or a financial education module you can recommend with tips to prepare for their future financial decisions.
Also, don’t underestimate the value of following up, especially when you have nothing to gain yet. Check in to make sure they got what they needed; it says a lot about your commitment to them as a person, not a sales target.
This kind of treatment will entice prospects to come back to you for guidance and counsel, and your time and resource investment will result in a loyal, lifelong consumer.
Additional Resource: Free Maximizing Differentiation Infographic
Consumers will always have an abundance of options. When you identify and double down on what your organization does that the competition can’t (or that you do better), invest in the resources that will facilitate a culture shift in your institution and prioritize serving people over selling services, these are the foundations of building long-term relationships that multiply each time you repeat the cycle.