Bill Hanifin
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If you have thick skin, you’ll do just fine as a banker. I know, I walked in the moccasins for about 10 years.
As economic cycles come and go, consumer confidence and trust in large financial institutions varies, but the range of difference bounces between “low and lower”. The American Banker Magazine (nicely relaunched recently and worth a read if you follow the industry) carried a short article reporting on the results of the 2011 American Banker/Reputation Institute survey.
The good news is that bank reputation scores improved between 2010 and 2011, with banks jumping up 2 spots and leaping ahead of telecommunications and energy firms. The bad news is that the improvement was from next to last in 2010 to 14th of 17 industries ranked in 2011.
Looking into the components of the reputation score, researchers noted that the impact of products and services on reputation scores diminished over the past year. Not surprisingly “Performance” was the highest-weighted factor as consumers continued to worry about the outcomes of the recent recession.
Less noticed was a shift in importance for “Innovation”. The researchers acknowledged that retail banking product and service offers in market were very much at parity and stated that “the days of being able to differentiate with free checking or a free toaster…that isn’t the path going forward.”
Here’s the best part – the article makes clear that the best way a bank can distinguish itself in the market is “by listening to customers, focusing on their needs and helping them understand how it makes business decisions.” If there was ever a research-driven foundation for further investigation of a relationship approach to bank marketing, this is it. After a bit of a pause, total relationship banking programs seem to be taking off again. Colloquy reported on two new programs launched recently – one from ANZ Panin Bank in Indonesia and the other by Union First Market Bank in Virginia. The concept has truly gone global as I discovered Touch Points Rewards, a well formed program from Abu Dhabi Commercial Bank (UAE).
If possible, banks have to uncover the means to become more approachable, transparent, and caring if they want to improve their market reputation. The stakes are higher than survey results however, as there is a big opportunity for credit unions, savings and loans, and banks large and small to differentiate in the market through recognition and reward of customers based on the overall relationship value. With pressure on individual products, debit and credit cards in particular, banks need to recruit the value of customer relationships if they are to mount a value proposition sufficient to change behavior and increase share of wallet with customers.
There’s no “one way” to structure a total relationship banking program, but there is one way that the programs will lead – to profitability.
