In this episode, Sean and Gina discuss optimism and opportunities for banking as we move into a post-pandemic recovery. From the rise of small businesses driving demand for commercial loans to population shifts away from urban cores, how financial institutions respond to changing consumer lifestyles and needs-states depends largely on their understanding of these new realities. Increasingly critical to post-pandemic banking is the smart utilization of data. In particular, leveraging people mobility data empowers banks and credit unions to make better decisions about growth, going where the people are, and the people are increasingly found in the suburbs and exurbs.
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 to 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. When post-pandemic economy predictions began, I don’t know, around this time a year ago, or even more than a year ago, very few of them depicted as sharp of a comeback as our economy seems to be having right now. And all of that has great opportunities for retail banking. We’ve got more people quitting their jobs, which obviously also has some negative effects in certain ways, but that is a sign that the labor force is as strong as it’s been since 2000. And that is a sign of a bounce back that will affect everything from credit to loan defaults that presents a great opportunity for bank and credit union futures in the near term.
Sean Keathley: Gina, you’re right. I mean, first of all, the decline was one of the worst in our history, but the nature of it also is creating one of the biggest comebacks ever as well. And I think that’s, what’s interesting. We’re not out of the woods yet, but there are certainly record levels of new opportunities. Small businesses popping up, it’s inflating opportunity across all types of financial institutions. And I think it is just the resurgence of the American people and their desire to return to some sense of normalcy. We talked to the meteor that hit us and COVID was unlike some of the challenges that we’ve seen in history that were financially based. This was a health pandemic. And the desire for people to move again is certainly showing itself in these numbers we’re seeing with businesses and back to work, et cetera, which is an exciting time for financial institutions.
Gina Bleedorn: The Wall Street Journal just published new businesses are sprouting at the fastest pace on record. And I think part of that is the economic recovery confidence in savings. But now the new remote possibilities that businesses can have in a startup capacity is at a place it’s never been before, given the state of remote work and its acceptance, and now prevalence across the country and across the globe. And that presents great opportunities for small business lending, of course, especially for institutions that had to put new protocols and processes in place with PPP, that can now use those moving forward to capitalize on these opportunities in a real way. And especially for community institutions versus the large banks that had relationship-based, one-to-one consult as part of their processes for getting PPP loans. That now can translate to all kinds of new business opportunities.
Sean Keathley: And Gina, that reminds me of one of our great guests and one of our wonderful clients, the CEO of IncredibleBank, Todd Nagel. And he talked about this, some of the ways they really reimagined opportunities through PPP and turned into incredible new lines of business for them. An example of his incredible success in the RV lending all came as a part of what we’ve all been through in the last two years. And now it’s an incredible opportunity that’s driving their bank to think about growth markets and new places of doing business that didn’t exist two years ago.
Gina Bleedorn: Yeah. The mobility trends have all kinds of, just now emerging, and we think soon to be prolific business advantages for community institutions as there continues to be, and is at a faster pace than ever before, migration out of urban cores into suburban counties and to suburban city centers creating the rise of secondary cities, of tertiary cities. All that has an opportunity for smaller institutions that aren’t the top five banks to either go into to capture new market share or double down where they already are in areas where people are moving in. So that mobility is huge and moving locations has always been the number one reason, consumers switch primary financial institutions, largely for the reason of if the institution has branches where I live and I feel they have branches wherever I need to go, then that’s the right institution for me. And with more people moving than ever before, especially moving from big places to little places, there is acquisition opportunity at an all-time high.
Sean Keathley: And I think about just Atlanta, my personal experience Gina, as we’ve lived here for a number of years. I moved here in 2013 as an example, and moving my family in, trying to decide where to live, it was a bigger market than I was coming from and all the data for me pointed to ITP. Let’s be in the perimeter, closer to the action, wherever the office was going to be, Buckhead, Midtown. And we’ve been very happy with that decision. A lot of amazing dining options. The food here is amazing. Southern New York City, it’s been everything that I thought it was supposed to be. That’s starting to change now, as I follow some of my favorite things on Instagram to show me what’s opening, what’s exciting. What would the kids like? Where can we go out to dinner? And I click on the link and it’s OTP, it’s outside the perimeter. It’s John’s Creek, it’s Alpharetta.
Sean Keathley: And I can’t ever remember a time when there were so many exciting things happening outside of the city core. And that is absolutely a result of what we’ve all been through. The number one reason people would not live up there, although a lot do was the long, daily commute times in, and you’ve just mentioned that’s changing. And so I really think there’s been a shift and it’s happening across the country. I read an article about people leaving Bozeman, Montana because now it’s turned into Bose Angeles. It’s gotten so fancy and it’s not even recognizable from 10 years ago. So to me, to get your arms around all this and think about expansion opportunities, there’s got to be a data component because what we’ve seen is a major shift.
Gina Bleedorn: Some economists have described what I interpret as an urbanization threshold or a perceived urbanization threshold. One of the things, however, with all this people movement that we have begun to really focus conversations with our clients on, is tracking mobility data and people movement data. Mobility data is anonymized, aggregated data insights tracked from mobile phones of people that have location services enabled, which is the vast majority of people. And it’s tracking not just where they go, but who they are, again, anonymously. So it’s not creepy or super creepy. And that data and the understanding of it can allow banks and credit unions or anyone with physical locations, any business, to understand where people are going and where people are going as well as where people pass by and where they are not going. There are entire areas of let’s call it, areas of recreation now, that have higher population concentration and pass-by impressions than ever before.
Gina Bleedorn: So understanding human mobility data is really critical when making decisions about sometimes just what market to go into, but especially where to go in that market and the difference of one neighborhood to the next, and one street corner in one neighborhood to the next. Mobility data, in our opinion, has surpassed market data. Although market data is still an important indicator, mobility data has surpassed it to provide really relevant insights into where to put branches and how to market in and around them.
Sean Keathley: And again, we’ve talked about Ulster Savings Bank in Kingston, New York. Kingston is 91 miles north of Manhattan. But certainly, if you think about the market data, it is not current with the 2020 census, with the seismic shift in people moving out of the city into a community like Kingston. Ulster Savings Bank grew 400% in 9 months. And so I think you’re right Gina, this is reshaping America, it is happening literally everywhere and in real-time.
Gina Bleedorn: All the more critical to know exactly where people are and generally who they are, where they’re going and where they come from. We have a client, United Bank, they’re about 26 billion in assets, mid-Atlantic bank. They’ve done 30 some odd acquisitions and growing, and we helped them open 2 branches in Metro, DC and in doing so, they would be opening themselves up to a much broader sea of competition. One on heavily trafficked K Street as a storefront, and a second in a more historic, but the still very high demographic area, Georgetown. And the design of those branches was critical to leverage billboarding just as awareness of their brand in the DC market Metro. But then we supported it with really targeted digital campaign messaging in and around those branch locations. The point is really targeting digital right in and around the uber local areas that you place, your branch is the best opportunity you have for success.
Gina Bleedorn: And as a result, programmatic display and paid search had 150 times above industry average results. And most of those page views were from DC audiences making well up into the six figures, which is who they were targeting. So leveraging branch location to work in concert with your marketing based on mobility data tracking is a key for acquisition success.
Sean Keathley: I’ve given some examples, but I really think all the assumptions that we’ve had previously about where people want to go in life stages, young people in big cities. I’m not sure it’s valid anymore. We’ve been through that big of a shift of behavior and it’s gone on long enough that it’s not going to just pop back immediately. I think this is going to have wave effects that will move on. And I think, Gina, you mentioned it, the flexibility of remote work may be as big of a component of any, in terms of where people can actually choose to live. Not being anchored to their office is making people rethink all of this.
Gina Bleedorn: You’ve got 25-year-olds moving to suburban and rural areas by choice in some cases and still believing they can achieve whatever dream they could achieve in a large city there. I think an important thing to be aware of though, is that the people movement is going to continue. And really no one is sure what’s going to happen because this upheaval inability to be detached, like you said Sean, from your place of employment has upended all traditional knowledge. Thus, the study and ongoing track of people data is going to be so important for decision making.
Sean Keathley: And we’re not just talking about data about mobility and moving. We’re talking about data across all parts of the organization. It’s clear that there’s a big advantage in embracing data. There’s a great new Accenture article just published that’s talking about even for commercial banks, that there is a 61%, is the average ROI achieved in terms of people that are more mature and their data analytics and how they’re using it. So if you’re thinking about how organizations are beating the mean or excelling and actually activating real opportunity, data is one of the things unlocking their success.
Gina Bleedorn: Consumer expectations in the post-pandemic era, which I think we can say we’re in, are shifting. And there are some key insights we recently published on Believe in Banking about those shifts. One of the most notable being that 84% of bank CEOs believe their business is fundamentally changing. And related to that, 82% of customers want human advisory on hand for complex transactions.
Sean Keathley: Well, another one that’s interesting, especially with this millennial generation, who’s grown up with a phone in their hand. 68% are interested in video banking with expert advisors. That coupled with this notion of 50% of consumers, that’s half of the consumer base is now interacting with their bank’s digital channels, at least once a week, at least once a week, tells you that it’s really all the channels, more than ever before, tends to be more in person as it’s more complex and maybe as the wealth and the experience is there. And then for the millennial generation, it may be around more what’s most convenient. Very interesting to think about the shifts in behavior.
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.