Can brick-and-mortar financial institutions leverage relationships to thrive in a digital world?
Adapting to the hyper-digital world has been a challenge for many businesses as rules of engaging and competing change. In particular, brick-and-mortar financial institutions are struggling to keep pace with the advances made by smaller financial companies over the past few decades. New technology has largely dissolved the barriers to entry for regional banks, credit unions, and FinTech companies, allowing them to offer the digital experience and scalability that customers need.
So how do traditional banks thrive in this new age? How can established financial institutions hold on to their small business customers? And what are the things that small business customers are looking for in a financial service provider? We’ve done a deep dive on the innovative ways brick-and-mortar financial institutions are transforming their marketing strategy to meet these challenges, and how these strategies are helping big banks to communicate their value, and continue to drive the growth that has powered them for so long.
“Too Big to Feel?”
One clear advantage that smaller financial institutions have is their ability to give individually tailored solutions to small business clients. SMBs are all unique, and desire to be treated as such, but larger financial institutions do not have the luxury of crafting individualized solutions for every business owner.
It’s clear that one-size-fits-all solutions won’t serve big banks for much longer, but what can be done in the meantime? How can big institutions avoid seeming impersonal and distant? One way to sidestep this issue is to market solutions by vertical. Specific businesses like restaurants, health clinics, and retail shops generally have needs that resemble others within their industry. Marketing a set of solutions tailored to suit the needs of a certain type of business fosters a sense of familiarity, which can help to attract small business owners who want to feel recognized for their unique value. It is crucial that big institutions market the breadth of services they offer if they want to compete with hyper-individualized solutions. 93% of SMB’s get all of their financial services from a single vendor, and 95% of SMB’s prefer this method of doing business . Big financial institutions naturally appeal to this “one-stop-shop” mentality, providing the convenience and simplicity that SMB’s crave.
It’s All About Accessibility
Another key area of competition that big financial institutions must prioritize is digital accessibility. Many FinTech companies have gained traction simply by offering a convenience factor that other institutions lacked. Need to send your friend money? Use an app and send it instantly. Need to get a payday loan? There’s an app for that as well. Expanding the scope of accessibility can help big institutions recapture the market share that has been lost to their smaller cousins.
Customers, and especially small business owners, need the flexibility that online banking services offer. Big institutions have the advantage of offering omnichannel access, where customers can reach them online, on the phone, in person, and through mobile applications. It’s essential that brick-and-mortar financial institutions leverage this, and market their accessibility as a key feature that helps them reach more people in more places, whatever their preferred method of communication may be.
Brick and mortar institutions can also leverage their physical presence. Smart advertising will focus on the reassurance that having a physical bank close by brings, and how that accessibility frees business owners from feeling tied down to one location or particular way of doing business.
Especially when it comes to SMB’s, flexibility is a major factor in choosing your financial provider. While digital services are nice, many businesses rely on their nearest physical branch for deposits, financial advice, and a host of other services. Ensuring that big banks’ marketing strategies emphasize their physical presence as well as their digital services is a sure way to capitalize on the needs of all potential customers.
CX is King
Everyone knows there’s nothing more frustrating than waiting on customer service. It’s a universal experience, but one that can quickly sour a relationship with businesses. Many SMB’s report that their choice to leave their financial service provider boiled down to poor customer experience. Being unable to find help, difficulty managing online and mobile banking, and concerns over data security are all issues that frequently drive customers away from financial institutions, both large and small.
Small financial service companies benefit from being able to provide one-on-one attention to their clients, whether that’s in-person meetings or simply a human answering a phone. Larger institutions, on the other hand, experience such high volumes of call and web traffic that it is impossible for them to put each individual in touch with a human.
Big banks must think outside the boundaries of traditional customer service if they want to create a model customer experience. Everything from landing pages to email responses helps to create a consistent customer experience and build familiarity. Over half of SMB’s use the same financial provider for both personal and business accounts , which means that creating an enticing CX is important for capturing businesses as well as individuals.
So why is CX so important? It helps to establish trust in a brand. Overall, SMB’s rank brand trustworthiness as the most important factor when deciding on financial providers . Rebuilding around CX means examining every customer interaction for ways to improve, and prioritizing the security and comfort of clients above all else.
What’s it all about?
Brick and mortar financial institutions aren’t going the way of the Dodo any time soon. Their marketing strategies simply need to evolve to account for the strengths and weaknesses of both themselves and their competition. Instead of trying to pretend to be something they’re not, big institutions should lean into the value they’ve always provided, and find new ways to communicate that value to customers who value speed and efficiency above all else.
In short, big institutions should market to verticals, emphasize omnichannel access, and revamp their customer experience if they want to keep up with all the new competition in the financial sector.