How Community Banks Win: Making Digital Personal
Community banks have consistently beat out their competition as a preferred financial institution. So what do these local institutions do that keep them ahead? It all comes down to one word, “Relationships”. They take the time to get to know their customers. Names, birthdays, family, and how, as a bank, they can make a dream come to life. A personalized experience is delivered to each and every customer, making them feel important and cared about.
More than a personalized experience, community banks have an additional advantage: their history. Community is one of the most defining words used to identify them. They have grown with local residents and have watched generations of families go through all their phases of life. That legacy has helped community banks become a part of local life, maintaining a reputation of trustworthiness.
Typically, the technology-driven, digital side of banking is not associated with community banks. Although many community banks have embraced the digital trend, there is still a large number that have not yet taken the first step of creating a simple website. In today’s cutting edge world, being digitally accessible is no longer a perk, it’s an expectation. Mobile banking is one of the first things tech-savvy customers seek out. After Venmo processed more than 60 billion in transactions last year, P2P payments are following close behind, transforming from a want to a need.
How can we determine what customers want vs. what they need? The line between the two has become quite blurry. Consumers have started treating banking like many other things, they are accessorizing. It’s no longer a one-stop-shop. They are looking around, choosing a savings account with high rate online, sticking to a traditional checking account at a local branch, and using Venmo, Google Wallet, or PayPal to transfer money to friends and family.
By adding digital components alongside your traditional offerings, you are opening up a new world of possibilities. The challenge is not to lose your community focus, while still being accessible to a larger group of customers. The trick is to change your idea of what the word “community” truly means. Traditionally, “community” has been associated with a geographical location, serving the communities of XYZ towns. When expanding your bank into the digital realm, you must also expand your notion of “community.” Now the word can refer to a group of people with similar ideas, needs, affinities, etc. Perhaps your new community will be a group focused on agriculture in the Midwest, you will grow from welcoming customers in your local, geographical community to welcoming customers in your ideological community.
As you embrace digital banking, it’s important to keep a tight grasp on the roots that make your bank stand out from others. The reason why consumers prefer community banks is the relationship. Personally connecting with customers, when your only form of contact is through an email or online help chat system, can be very difficult; however, it will force you to work that much harder to keep your personal touch.
Most of us can agree that simply adding a customer’s name to an email is the bare minimum and that hardly qualifies as maintaining a relationship. Take your efforts further by taking advantage of the data your core provides. You have the ability to know what your customers are doing. Did they recently change their address? That could mean they just moved or are in the process, reach out, can you help them in some way? Do you notice a trend in what your customers need? When someone opens a particular style of savings account, are they drawn to a similar checking account to match? Engage with them earlier in the process, right when the thought becomes a need.
Digital banking isn’t going anywhere. Community banks that embrace it are, in turn, embracing their power to look at their community as more than a location and ditch the idea that they need a physical presence everywhere they do business. Becoming digital doesn’t mean the end of the personal touch that makes your bank great, it means the beginning of taking personal banking to a new level.