At FMS, we are always looking for ways to separate our client’s brand promise and position from their competitors’. The ultimate goal is to help our client connect with their customers in a way that is relevant, emotional and creates positive experiences. Sometimes, this might require a long-term vision for greater market share and profitability to offset short-term revenue.
In a recent article by American Banker, Huntington Bank was highlighted for offering a 24-hour grace period on overdrafts. It was a bold move from the bank, but has proven to be quite successful thus far. Here is a direct quote from the article—“Huntington, of Columbus, Ohio, began offering customers a grace period on overdrafts in September, in response to new regulatory guidelines that require banks to get customers' permission to cover overdrafts. And if the first few months of the program are any indication of its long-term success, other banks might want to consider following Huntington’s lead.”
I think it is critical to understand that the current disruption in the marketplace is creating opportunity for banks to gain market share. The consumer is more willing to change banks today than they have been throughout our lifetime. Therefore, we recommend that our clients constantly look for ways to build brand awareness so that they are at top-of-mind when consumers are thinking of changing financial institutions. It doesn’t have to be the exact approach of Huntington Bank, or even one remotely similar. The concept, however remains the same. Ultimately, your brand is nothing more than what the consumer “feels” about you. Give your communities reasons to feel good about you during this time and you will have more opportunities for market share growth that will result in greater revenue in the long run.
The window of opportunity will not be open forever. Banks that seize the opportunity now (over the next six to nine months) will show the greater results in the years to come.
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