A Response to “Irresponsible” Banking Practices

It seems like banks have become an easy target in this current economic environment. The government, having bought the right it seems, points blame at the banking industry’s “irresponsibility,” and the media takes the bait. Perhaps it is time for the banking industry to present another side to the debate.

Throughout this entire experience, the media and congress alike have confused the irresponsibility of Wall Street with the solid banking practices of Main Street. Therefore, consumers are hearing daily stories about bank executives making big money while others have lost their life savings, about how banks are hoarding cash, and how banks are responsible for the current credit crunch.

Thankfully, the ABA and state associations are doing a tremendous job of communicating through talk shows and press releases. However, many people in our markets are not hearing those voices. Therefore, it is incumbent upon each bank to be communicating in the marketplace. Following are recommendations on what you can be doing and saying during these times.

1. Your Brand: In these times, it can be easy to lose sight of your brand and just react to all that is going on around you. However, do remember that you have a brand, and people feel loyalty to brands. If a buyer is loyal to a brand, they are less likely to stop purchasing those services during slow economic times. We actually draw comfort from continuing to see “The Coke Side of Life” messages instead of public announcements from Coke about the economy. Therefore, continue to present your brand message to the marketplace.
2. Safety and Soundness: You need to continue to let your community know that you are safe and sound. If you have good ratings, publish them in the paper and use them in your advertising. However, do communicate this message within the context of your brand and with optimism. Communicate clearly and often. You cannot over communicate during these times.
3. Money to Lend: While each bank has different portfolio needs and capacity, it is important, under the current situation to communicate to the community that your bank is lending money in order to support the various needs of your community. Obviously, there are going to be credit issues and concerns, and we don’t want to take on unnecessary risk. However, we do need to let people know the bank is lending money. You might consider doing a series of ads featuring high-profile customers (most likely business customers) giving testimonials of how the bank met their credit needs in order to help them meet the challenges of the current economic environment. In our contemporary culture of Internet and Web 2.0, people are more likely to respond to a consumer message vs. a sales pitch from the bank. Therefore, utilize any equity that you have in your customer base.
4. Sponsorships: Look for opportunities to participate in local sponsorships that are consistent with your brand. Education, sports, housing, and small businesses are always areas of interest to your community. For example, it is a good time to announce a new scholarship program for local students. Make sure to have press releases, pictures and media kits to get the message out through your local media.
5. Involvement: It is very critical that your bank employees are out in the community participating in social events. We need to have an officer at every club luncheon, grand opening and anniversary celebration. Make sure to provide your people with the proper talking points on the safety of the bank and the bank’s commitment to serve the community.
6. Value: According to leading marketers around the country, the key word for this year is going to be “value.” The consumer is moving from materialism to “conscious consumption.” Therefore, within your brand, you will need to show the customer that you provide value. Pay close attention to your existing customer base, and increase your communication to them through various delivery channels of statements, retail merchandising and your web site.

I think we all know that there is not going to be a quick fix to the current financial crisis. As a result, it appears that the attacks upon the commercial banking industry will continue. Therefore, keep communicating, keep participating, and keep your building your brand.