Is Your Bank “Differentiated” for 2014?
As financial institutions set their competitive agendas for 2014, each is looking for ways to distinguish themselves to potential customers in meaningful ways. Whether the customers are consumers or small businesses, banks are looking for stronger ways to connect or to create a path to a wider net to boost market share and profitability, and some of the ways they are doing that are getting smarter, more creative, and better targeted.
In a quick sweep of media coverage recently here are some of the stand-out programs that are showing potential for the New Year:
1. Free credit scores or similar financial planning support – Aw, Suze Orman must love this one! So far, only two lenders in the United States are doing this – surely you have seen their TV commercials – but more banks and lenders expect to offer this or comparable support to their customers. With lending services potential money makers for banks, this helps the financial institution counsel consumers in self-identifying road blocks to their financial success. I really like this one!
2. High tech, low fees – In an article appearing recently in American Banker, we learned that some banks have achieved fast growth by focusing their strategies on technology and low fees. In one case, the bank identified that about 85 percent of its business came from small and mid-sized businesses in its region, so it decided to focus on remote check deposit service support.
The bank supported that strategy by doling out free check scanners that can handle 100-check batches, so deposits are more convenient. Successful? The bank says it is already getting about half its deposits from this capability. By comparison, its competitors charge $49-$99 per month for scanner rentals. By the way, if the scanner breaks, new equipment is rushed to the customer on a same-day basis. Aside from great customer relations, this action has also reduced costs, in a bit of a snowball way, and has also made the bank more profitable.
An added bonus was that its use of technology boosted some of its new business wins – and the technology won the deal with less emphasis on pricing.
3. Finding opportunities in the data – Sitting behind these strategies is probably an underlying marketing breakthrough – financial institutions are looking harder at customer data and untapped centers of profitability. Data, when combined with good solid market research, is helping even mid-sized institutions laser focus where the opportunities are, and innovative new programs that are the end result are making even mid-market sized banks more competitive.
I can’t help but look forward to the year ahead to see what additional technology or benefits will be offered to me as a consumer or to the businesses in my area! What is a good New Year’s resolution for any bank? Assess how technology can support your marketing differentiators in the way these examples did.