Banks and credit unions meet people where they are on their with practical products and meaningful solutions
Despite data that indicates a strong economy – a healthy labor market, rising wages and declining inflationary pressures – American consumers are still being challenged by high costs on everything from groceries to housing. “The gap between how the economy is and how people feel things are going is enormous,” according to an analysis in The Atlantic. “Sometimes, people’s personal financial situations are just stressful – burdensome to manage and frustrating to think about – beyond what is happening in dollars-and-cents terms.” So, while economic growth may be robust on paper, people’s personal economies are causing overall consumer confidence to wane.
People need support from their banking relationships, but not the prototypical “financial education” that provides generic guidance on how to spend or save. People want practical solutions for their lives. “The reality is that in today’s economic climate, one additional Fed rate hike, a lost job or unexpected expense could push too many Americans to slip from scraping by to a precarious financial position,” according to Forbes reporting. “At its best, the banking sector has the potential to not only protect consumer assets, but also to design products and services that bolster customers’ financial stability – giving them the tools to address liabilities responsibly and create wealth.”
That’s what Frost Bank is doing in Texas. Responding to higher interest rates and housing costs in the Lone Star State, Frost has developed a proactive program to offer mortgages to lower-income Texans. “The intent is to help in this unique moment where affordability is at all-time lows,” says Jimmy Stead, Frost’s chief consumer banking officer, in an interview with American Banker. “Factor after factor is challenging a lot of families … and preventing them from being able to afford or fix up their home.” This new fleet of loans are available to borrowers who make less than 80% of their county’s median income, offer terms up to 30 years and provide credits to help cover closing costs.
Another actionable area banks are improving is account opening. Many people turn to their local branch for financial support, but opening a new account is time consuming – not in matching the right banking product to their needs, but because of red tape. “The account opening experience should not be a 45 minute conversation, printing all kinds of materials and typing in 40 fields of information,” says Wells Fargo’s Michelle Moore, at American Banker’s Digital Banking conference. “The application should be five minutes. The rest of the time should be the conversation.” This conversation allows bankers to discover a person’s unique needs and provide practical, personalized solutions.
If you’re a banking leader looking for experience strategies customized to your financial institution, get in touch with the experts at Adrenaline. And don’t forget to subscribe to Believe in Banking to stay up to date with the latest news impacting the banking and credit union industries.