The Big Shift by Brett King

 Branding, Competition, Cross-Sale, Customer Acquisition, Customer Service, Data / Statistics, Demographics, Gen Y, Marketing, Pricing / Rates, Profitability, Strategy, Uncategorized  No Responses »
Jan 102013
 

Brett King discusses how customer behavior and technology are changing the future of financial services. The reality will challenge the thinking of traditional Bankers through a discussion of topics including: · Why customer behavior is so rapidly changing, including the four phases of disruptive change; · How community financial institutions and their branches must evolve; · Why checks are rapidly disappearing and cash is next; · Why your mobile phone will replace your wallet in the next 2-3 years; and · How financial institutions must reinvent themselves or become irrelevant    

To TAG or not to TAG

 Competition, Data / Statistics, Regulations, Strategy  1 Response »
Dec 102012
 
To TAG or not to TAG

Should Community Bankers care about TAG!? Do they need it?  Do they use it?  Some would have you believe that TAG, and its renewal are central to the survival of Community Banks… without it, deposits would evaporate… Luckily, that isn’t the case.  Not at all.  Just take a look at FDIC Quarterly Banking Profile report for 3rd Quarter 2012. Data shows that Community Banks use TAG to insure just $50 billion of deposits (~3% of the total TAG deposits), with a typical Community Bank insuring an average of just 17 accounts.  Not surprisingly, the primary users of TAG are a small number of very large banks… just 108 banks to be precise that cumulatively hold more than 90% of the TAG insured deposits. Should Community Bankers care about TAG?  Is it important to their business?  The numbers very clearly demonstrate that TAG is only important to 108 large banks.  Community [Read More...]

Why Community Banks are Ill-Positioned to Serve the Cash-Less

 Competition, Cross-Sale, Customer Acquisition, Data / Statistics, Marketing, Pricing / Rates, Profitability, Strategy  2 Responses »
Dec 072012
 
Why Community Banks are Ill-Positioned to Serve the Cash-Less

Most Americans have little or no cash.  Most, it appears live paycheck to paycheck.  Schwab’s OnInvesting magazine published a story summarizing the findings of a Bankrate survey conducted in June 2012 which shows that just 25% of Americans have enough cash to support at least 6 months of living expenses. Why is this relevant to Banks and Credit Unions?  Well, for one, it validates other findings that suggest that most consumers hold less than $1,000 in deposits.  But perhaps more importantly, it suggests that the vast majority of consumers are unlikely to be interested or approvable for the vast majority of products and services that Banks and Credit Unions wish to sell. For example, we all recognize that Banks and Credit Unions typically have a good track record in lending to individuals with high credit scores, ample income, and high net worth — the traditional ‘A paper’ credit.  On the [Read More...]

Some Bank Customers Are Better Than Others

 Competition, Cross-Sale, Customer Acquisition, Data / Statistics, Demographics, Gen Y, Marketing, Profitability, Strategy  2 Responses »
Jun 042012
 
Some Bank Customers Are Better Than Others

As with everything in life, some things are better than others.  To some consumers, Coke tastes better than a generic cola.  To some car buyers, a Mercedes is preferred to a Honda.  To some print store owners, a customer placing a large order is preferred to a customer placing a small order.  To some financial advisors, a client with a large portfolio is preferred to a client with a very small portfolio. We ought not be surprised that the preference likewise should hold for customers and members of Community Banks and Credit Unions.  That is, a Bank or Credit Union executive, assuming a rationale individual, should prefer a customer / member that is capable, willing and interested in purchasing numerous banking products & services over a customer / member who is interested in just one or two basic products. To help us understand customer segmentation, FIS Global recently published an [Read More...]

Gen Y Hard Hit By Recession But Youthfully Optimistic

 Customer Acquisition, Data / Statistics, Demographics, Gen Y, Marketing, Profitability, Strategy  2 Responses »
Apr 242012
 
Gen Y Hard Hit By Recession But Youthfully Optimistic

Community Banks and Credit Unions are doubling down on their efforts to grow the proportion of Gen Y in their customer base.  We find this strategy puzzling given the mountains of data that suggests Community Banks and Credit Unions should focus on the affluent (read here and here), rather than investing resources on Gen Y which is likely to results in negative ROI (read here and here). Yet another data point comes from Pew Research Center that notes that Gen Y has been hard hit by the recession and the profound changes in the employment realities.  Their February 2012 survey entitled Young, Underemployed and Optimistic provides important insights to businesses that believe that their near-term (next 3 – 5 years) growth and profitability are dependent on Gen Y. Optimism Just 31% of Gen Y say that they earn / have enough to have the kind of life that they want, [Read More...]

Focus on Affluent Consumer Is More Important Than Ever

 Competition, Customer Acquisition, Data / Statistics, Demographics, Marketing, Profitability, Social Media, Strategy  No Responses »
Feb 012012
 
Focus on Affluent Consumer Is More Important Than Ever

Affluent consumers have lower unemployment rates, they spend more, they invest more and they are easier to reach. Community Banks and Credit Unions should redouble their effort to grow this demographic as one of the tactics to resuscitate their ailing growth and profitability performance.

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