What happens when a small community bank becomes the focus of a grassroots movement? How does the bank sustain and develop the welcome—but unexpected—growth?
In an early July radio interview, Michael Render—better known as Killer Mike, a hip-hop artist who has spoken frequently in support of moving dollars to local black banks—was asked how communities could respond amid frustration that charges were dropped against officers in the Baltimore Police Department. They had been accused in the April 2015 death of Freddie Gray. “You can go to your bank tomorrow and you can say ‘Until you as a corporation start to speak on our behalf, I want all my money. And I’m taking all my money to Citizens Trust,'” said Render. Based in Atlanta, $404 million asset Citizens Trust Bank gained 8,000 new accounts in a five-day period following Render’s plea.
“The community reached a point of frustration,” says Michael Grant, president at the National Bankers Association, a trade association for minority and women-owned banks in Washington, D.C. “It’s time for the African American community to pull together, to look inward and say ‘wait a second. What can we do to strengthen ourselves economically? What can we do to lift ourselves up?’”
The Bank Black movement dates back decades, with roots in the civil rights movement, but recent support is tied to concerns raised by Black Lives Matter. It encourages African Americans to move money into black-owned banks, which in turn support urban communities. There are 24 black-owned depository institutions, according to the Federal Deposit Insurance Corp.
Moving money to black-owned banks, and supporting black businesses, is seen as a positive way to empower local communities. “If we can support these institutions en masse, then these institutions will have a greater capital base, and these institutions will then be able to provide more financing to businesses, to people who need mortgages, to help build wealth,” says Blondel Pinnock, chief lending officer at Carver Federal Savings Bank, a $743 million asset black-managed, publicly traded bank which gained $3.9 million in deposits in July.
OneUnited Bank, which has five branches in low and moderate-income communities in Boston, Miami and Los Angeles, has stepped up its promotional efforts in response to the recent attention to the Bank Black movement. Online visitors are encouraged to take the #BankBlack Challenge by opening a $100 savings account and challenging friends to do the same. The bank has also hosted events in Miami and Los Angeles. OneUnited drives both its online and in-person efforts through the bank’s Facebook, Twitter and Instagram channels.
“A lot of banks are, to some degree, questioning the value of [social media], but it actually can drive traffic into your branch, as well as online traffic, so we’re seeing that it’s worth the investment,” says Teri Williams, president of the Boston-headquartered bank, which has $622 million assets.
In early August, OneUnited reported via social media that the bank had gained $10 million in deposits in July. This windfall in accounts taxed bank staff. “We’re opening up 1,000 accounts a day. We used to open 10 or 20 accounts a day,” says Williams. Tablets within the branch allowed customers to sign up for an account online, with staff available for assistance. But despite increasing staff, customers still experienced long lines in branches.
Williams says OneUnited will continue to use social media and hold events to sustain growth driven by the Bank Black movement. The bank is also adding a call center in Miami, in addition to a current call center in Los Angeles, to handle the increased volume.
Can banks like OneUnited continue this level of growth? There’s always the risk that customers won’t like the technology that small banks provide, especially if they are coming from a large bank. “The proof is in what you do next, and how you sustain it,” says Chris Lorence, executive vice president and chief marketing officer at the Independent Community Bankers of America (ICBA). A well-planned marketing campaign is critical to gaining and retaining customers in the long run, even when tied to a social movement. Banks will also want to create a deeper, stickier relationship with new customers through other products and services. “Were you prepared organizationally to take the next step?”