Local Businesses Need Community Credit Unions & Banks (Even In An Online World)
As the market becomes increasingly saturated with varied players, the essence remains unchanged: it's the age-old game of relationships. The technological scene will continue to shift, but at the core, business owners seek genuine assistance.
The Role of Trust in Modern Banking: How Local FIs Can Thrive Amidst Neo-banks and Powerhouses
In today's fast-paced financial landscape, dominated by neo-banks and industry titans such as Amazon, one might wonder: Can traditional banks keep pace? Or even more fundamentally, do relationships in banking still matter?
A revealing 2022 JD Power Small Business Banking Satisfaction Study sheds light on this. It discovered that, for small businesses, the most influential factors in banking are, unsurprisingly, trust and the human touch. It's simple: people form relationships. These relationships breed trust, and trust cultivates loyalty.
In their pursuit of efficiency, neo-banks and Amazon are increasingly phasing out human interactions from their customer relationships. While this model has its merits, it inadvertently opens up a world of opportunities for local Financial Institutions (FIs) - an opening to establish deeper roots and expand during these crucial times.
To thrive in this evolving landscape, here are some strategies local FIs can consider:
- Offer the Best of Both Worlds: Businesses need not sacrifice personal touch for modern services. Ensure they receive the value of personal relationships while enjoying state-of-the-art technology. From tools that aid in digital rent collection for landlords to inventory tracking and payment capturing solutions – it's essential to provide a comprehensive suite of online services. Form strategic partnerships with fintechs and local payroll or HR management companies to enhance your service range. Your unique selling point? A blend of cutting-edge services with a personal touch.
- Nurture New Businesses: Every startup or small business requires a checking account. These accounts are cost-effective for banks and often yield more than personal accounts. Recognizing these nascent businesses, fostering relationships, and guiding them as they grow is imperative.
- Target Ideal Businesses: Recognize and engage with businesses that mirror your existing client profiles. Since they already resonate with your banking style and services, they will likely be a perfect match.
- Client-to-Business (C2B) Approaches: Leverage intelligence tools to pinpoint current retail clients who might have affiliations with businesses. Chris Wachtel, CEO of WordCom, mentions, "Existing personal relationships are often a gateway to business opportunities. Expanding from the personal to the business sphere has been highly effective for us and our clientele."
As the market becomes increasingly saturated with varied players, the essence remains unchanged: it's the age-old game of relationships. The technological scene will continue to shift, but at the core, business owners seek genuine assistance. It's time to reinforce existing business banking relationships and forge new ones. Remember, while technology empowers, relationships reign supreme.