Four Ways to Position Your Bank for Growth When the Market Slows Down

market-5-17-17.pngIt was easy to celebrate in late January when the Dow Jones industrial average closed above 20,000 points for the first time in history, although that spike was short lived. Many forecasters continue to predict a market correction and possible worsening of credit metrics as many banks have overextended themselves or taken on too much interest rate risk. There is concern about a potential downturn in the economy that could hurt banks.

Large market shifts are a major concern for any board, and they are especially concerning for banks. At the same time, there is potential upside for those who are ready to make the most of it.

History shows that the markets always bounce back higher after corrections. But, not everyone bounces back at the same speed. Here are four steps you can take today to help ensure your bounce is faster and higher than competing banks:

1. Really Know Your Customer
Periods of economic uncertainty are when people are in most need of a trusted financial institution. They need a partner capable of helping them in their unique set of circumstances. To be that trusted partner, banks need to leverage their data, all of their data. The more data points a bank is able to analyze for each consumer, the better they will be able to know them. Knowing the customer’s age and account balance is only scratching the surface of a bank’s potential to know their customers. Understand each customer’s activities, interests, channel preferences in terms of desktop computer, branch visit, phone call or mobile text message, competitive product mix and spending habits, and upcoming life events. A downturn is the best time to build a customer base and forge meaningful and lasting relationships by proactively extending a helpful hand to work together and get through harder times.

2. Get From Data to Message Faster—Much Faster
It takes far too long for banks to learn what their customers need and then offer it to them. Many financial decisions are made in a matter of days–not months or even weeks. Banks that cannot close the gap between insight and communication are at risk of losing market and wallet share.

3. Meet Your Customers Where They Are
Once you know your customers’ needs and are able to quickly communicate how your bank can help in their unique circumstances, you have to make sure to communicate and interact with customers where they are. You’ve heard it before, and it’s true, part of knowing your customer is knowing on which channels they interact. A message on a desktop website will never reach a customer who does all their banking on their mobile phone. Today’s environment requires you to deliver content on the channels they actually use.

4. Measure your Effectiveness, and Don’t be Afraid to Make Changes
If you’re devoting all your marketing messages to one channel, such as email, you’re guessing that’s the most effective avenue. What messages are working? Which are failing? Launching a campaign is just the start. To reach customers in meaningful ways today, banks have to be able to adjust faster. You simply can’t wait six months to see if what you’re doing is working—you’ll miss your chance, and someone else will take your place. You have to see what’s working in real time.

Years ago, each of these steps would require a large budget and significant IT time. Today, services can be quickly deployed with little overhead to help you really know your customers, and quickly develop relevant messaging for products they care about.

Most wealth is generated after a downturn. Your bank should be ready to responsibly capitalize by offering customers true value. Following these four steps will help your bank focus on what your customers really need and how to share that message with them.

This article first appeared in the Bank Director digital magazine.


Rob Heiser