“It will be harder and harder for smaller banks[and credit unions] to deal with a typical retail client because the big banks spend billions of dollars per year making it easier and easier to bank electronically. It will be harder for community banks [and credit unions] to capture that client.
“Banking is a scale business. You can’t make a lot of money … if you’re too small. So whatever size you are, you need to double that [to survive].”
– Jim Deutsch, Managing Partner, Patriot Financial Partners, during an interview with Kaplan Partners
Wouldn’t it be great if you had the ability to know when a change needed to be made in order to more positively affect the path of your future? To see the future, often what’s needed is a passionate sense of being present in the moment and understanding what today’s actions mean for tomorrow.
Right now, the community financial institution industry is at a pivotal point. The choices we make today will greatly impact the future of our community bank or credit union – even to the point of existing in the next decade.
As Jim Deutsch points out in his chat with Kaplan Partners (available here), community financial institutions are at risk in today’s market. Electronic banking – convenient electronic banking – is controlling where consumers choose to do their financial business. With the national bank brands being able to invest billions of dollars in this style of convenience, the community financial market gets left behind a little more each year.
But it’s not all doom and gloom. Deutsch makes a point about community banks and small business owners in his interview that is very relatable to all community financials. He opines that while the big banks stand a better chance to gobble up typical retail bank customers, community banks and credit unions will reap the benefits of small business owners and entrepreneurs that want to be able to have decisions made on a less bureaucratic and less policy-driven model than the big banks provide.
For community financials, the model is similar to trading off the transactional accounts in favor of reaping the benefits of keeping our borrowing consumers. Retail consumers still desire personalized service and attention when it comes to dealing with borrowing money.
So why can’t that model apply to checking accounts, debit cards, and credit cards, too? It can. It just takes a different approach to grow this retail base.
It takes marketing.
Having a well-defined and properly executed marketing strategy can make the difference between an organization that is growing and thriving and one that is not. Marketing, internal culture, and brand aspiration can all work together to make your community financial institution a viable resource for consumers for years to come. Falling victim to the fallacy that marketing and cultural investment is cost prohibitive and detrimental to the health of the organization will only worsen the situation.
Consolidation will continue to happen in the financial industry – that part is certain. Finding ways to limit your organization’s exposure or even being the surviving brand is the way to defeat that. So, what does your marketing strategy look like this year?