In this episode, Sean and Gina discuss community building in banking. As one out of ten people considers switching primary financial institutions and 25% of businesses expecting to switch their banking relationship this year, there are new opportunities for community banks and credit unions to start new relationships. Expanding on traditional definitions and assumptions, community building goes beyond the boundaries of geographic location to create new relationships around a common set of interests and values. Sharing relevant examples, Sean and Gina recommend community institutions leverage the power of affinity, life stage, values, expertise, and local commitment to deepen connections with customers.
Text Transcript
Intro: This is Believe In Banking, a podcast series for decision makers, influencers, and leaders, featuring experts taking on the financial industry’s most pressing issues with insight and empathy. The podcast features information and conversations designed to enlighten and empower. Here are your Believe In Banking hosts, Sean Keathley and Gina Bleedorn.
Sean Keathley: Welcome. This is our podcast for Believe In Banking. I am Sean Keathley, President and CEO of Adrenaline.
Gina Bleedorn: And I’m Gina Bleedorn, Chief Experience Officer at Adrenaline.
Sean Keathley: Well, Gina, our last episode was so exciting. We had Luvleen Sidhu from BM Technologies and just what an inspiring story her personally breaking through glass ceilings, leading a public technology firm and just such a great message. I think our listeners thoroughly enjoyed that.
Gina Bleedorn: Yeah. Hearing from the Fintech sector is something that I think is helpful for all community banks, especially as fintechs keep encroaching on traditional bank market share certainly in payments, but even now in core banking products. It’s something that every bank and credit union needs to at least be aware of and pay attention to, to know how to position themselves alongside the type of offerings that fintechs provide, especially when getting opportunities to partner with fintechs, like some of the new white labeled products that bank mobile and other fintechs are offering. These are definitely things community institutions should be considering.
Sean Keathley: I agree. I’m excited that there are some of these forward thinking fintechs and forward thinking community banks that are seeing the advantages each bring, understand together they could provide more collective value. That’s an exciting idea, and Luvleen even talked about albeit digital, the notion of building these communities. And I think that’s a central theme we want to pull on today as well.
Gina Bleedorn: Yeah. And I think the idea of building community sounds old maybe, but is actually new because there are so many ways to build communities now and so many different varying types of communities. And on top of that, people are seeking like-mindedness in communities of all types, more than they ever have. The opportunity in banking actually for new customer acquisition hasn’t ever been higher than it appears to now be in 2021, one out of 10 people say they are considering switching primary financial institutions in 2021. According to KPMG, as a point of comparison between 2018 and 2019, about 4% actually switched banks and now 10% are claiming that they are going to at least consider it. That is higher than it’s been in a decade. On top of that, according a recent study by Noventis, 25% of businesses are expecting to switch their primary banking relationship this year as well.
Gina Bleedorn: So I think the time of reflection that was 2020 have forced financial wellness to the top of many people’s lists, as well as not being complacent with the status quo and wanting to make changes for good. This is an amazing opportunity for community institutions to take hold of because the top six banks control over half of the market share. So the majority of these people are looking to exit out of their large bank relationship into a more localized institution. And that’s where the idea of community both virtual and physical comes in. While Luvleen was talking about virtual only communities, when that’s overlaid with physicality, that’s a sweet spot of differentiation for you. So capitalizing on the communities where you sit and reaching the like-minded people in those communities, those are the communities you want to build.
Sean Keathley: I do agree the idea of community is not new, but I think we’re thinking about it in a new way, maybe in a bit of an expanded way, and there are a few examples we can reference. In one of our good clients, Town & Country FCU up in Portland, Maine, in thinking about the local communities there and not only the types of people, but the type of life stages. And an example of a very targeted ad for a mortgage is a little puppy in a luscious green lawn, and it talks about more space for him to roam or that new gaming room that is the perfect place for that young professional that is a gamer and has a specific place to do it. So thinking about those sincere moments that people are dreaming about, and those ads are talking to them directly.
Sean Keathley: Another example, another client of ours Valley Strong, the other side of the country over in the Central Valley, this idea of market entrance, and this story is on Believe In Banking, what they’re doing is trying to drive new member growth but they’re thinking about it in a very specific way. For instance, thinking about Hispanic millennial mothers, up and coming professionals, very focused life segments and very targeted campaigns, very targeted ads to really think about what kind of needs do they have and how can a financial provider connect and help them. And then there’s nothing more community focused than that. We continue to think about communicating in all channels, but the reason people are going to come in are going to be more purposeful and thinking of people’s life stages, those are moments when people are going to need their bank and maybe get the ad online, but go see their banker.
Sean Keathley: We’ve got another great client and going to be a guest on our podcast, very excited about very visionary CEO, Todd Nagel, an IncredibleBank story, which is just awesome. And we’ll have him tell it firsthand, but this notion of doing good in the communities and the amount of help they provided the areas they serve and almost a million meals they donated in 2020. And one of the most exciting things I think, and so unique about IncredibleBank is this 15 acre farm they have in Central Wisconsin. And this notion of really thinking about feeding Americans and there’s nothing better than that Central Wisconsin organic food. And this is an example of truly living up to your values. It’s not just speak, you see an entire organization and all their culture believing in doing good. And there’s others, whether it’s ICBA’s, bank on local, KeyBank is talking about financial wellness. We’ve been talking a long time about a role of b ranch in the future is going to be education. So just a few different examples of how expanded community is coming to life.
Gina Bleedorn: So let’s dig into the idea of financial literacy. Also not a new idea, but one that has new relevance or perhaps a new level of importance. Financial wellness we have talked about before and the idea that consumer confidence in their bank to look after their financial wellbeing has dropped by 35%. In the last two years, they’re satisfied, but not confident that their banks are really giving them good financial advice or real help, that is both a challenge and an opportunity. 49% of consumers’ primary goal in 2021 is financial wellness and reciprocally 30% of financial institutions top priority is developing better financial planning tools. So I think that while the development of PFM and tools and FinTech partnerships that help enable that are important, the idea of real advice giving from real bankers, virtually, physically, so that consumers are not going elsewhere to receive financial help, it’s the lowest hanging fruit opportunity that most institutions have in winning customer hearts and minds.
Sean Keathley: Gina, you’ve been mentioning these really surprising statistics about the number of people that are thinking of switching, which creates just tremendous opportunity. And really what makes the banking world special is they really have the ability to back this up and thinking about financial planning coming from a trusted advisor. And I think that’s a position these community organizations can really fulfill. Who better than to allow you tools to do budgeting and planning, than those experts that can help you navigate all of those life moments we’ve been talking about, and I think that’s an exciting development.
Gina Bleedorn: Interestingly, as people are shifting what they want from brands across everything in their lives, there’s a lot of implications, both direct and indirect for banking. So back to the idea of building communities and how banks can play a role in consumers’ lives to do so, there’s five key classifications according to a few different articles, KPMG, Pricewaterhouse and Accenture, the impact of COVID has shifted people’s priorities in brands in a few different ways. 30%, this is the most, are putting value first saying they want to live within my means and transact with brands that help me do so across the board. 26% putting health first saying they’ll choose brands and products that they trust to help them feel safe. 17% putting the planet first, 16% society first and 11% experience first defined as products and services that feel like they are made just for me. And overall 7% plan to change the way they bank long-term. So again, a complete reassessment of life has happened in the minds of most people. And what that means for building communities is finding like-minded people with like-minded values.
Sean Keathley: And Gina, that’s going to be an exciting conversation. Our next episode, we’ve already mentioned, we’re going to be having Todd Nagel. Todd is the CEO of IncredibleBank, and he will be our guest on our next podcast. And just a remarkable example of living up to values. The story with Todd is just fascinating in hearing how truly they take it to heart to live up to their value proposition and it’ll be much better hearing it directly from him. And I think what’ll be exciting for everyone to hear is how they are taking those internal values and making them come to life in the communities they serve in a real way, and exciting to see how it’s cultural and it’s organization wide. It’s not just Todd and his visionary leadership, but it’s every single individual in the organization making a difference in the communities they’re in. And that’ll be an exciting discussion we’ll have on our next episode.
Gina Bleedorn: What I like most about it is, it is living and breathing your brand through and through, they want to be incredible, incredible to their people, incredible to their customers, incredible to their communities, and they stop at nothing to make that brand promise come to life.
Outro: You’ve been listening to Believe In Banking, a podcast series created to empower decision makers, influencers, and industry leaders in financial services. Be sure to also join us on our flagship site, believeinbanking.com.