BankMarketingCenter

We all know that every company in every industry faces the prospect of a cyberattack that poses a threat to their data security. And we all know that the likelihood of an attack — ever more sophisticated attacks, too — is growing every day. Banks, of course, are high value targets for cybercriminals; one, they gather and manage tremendous amounts of customer personal data and two, in the event of a ransomware attack, banks have the wherewithal to meet a cybercriminal’s ransom demands.

The epic problem that cybercrime poses to banks, and their customers, couldn’t have been made more clear than by an article I read (and you probably did, too) just a week or so ago in American Banker. The article reported on the 10 biggest financial data breaches of 2022. This year, apparently (and frighteningly) the number of consumer records leaked in breaches globally exceeded 254 million, 9.5 million of which were reported by U.S.-based financial institutions. Flagstar Bank is one institution that made the list and is now facing multiple class actions lawsuits as a result of more than 1.5 million customers’ names and social security numbers being exposed.

The bank is, in response, “offering complimentary credit monitoring services.” I remember receiving a similar offer when an institution with which I’d been doing business notified me that some of my PII (Personally Identifiable Information) had been exposed in a security breach. I can’t say I was very pleased when I was told that I now qualified for one year (imagine that, a whole year!) of free credit reporting so that, and I’m paraphrasing here, “I could check on my credit report regularly in order to spot any “irregularities.” Needless to say, I have bid a not-so-fond farewell to that provider, never to return again.

I know that protecting people’s personal information is hard. But, let’s face it, there are lots of steps that organizations that handle PII can do to make sure that it stays secure. Some are even fairly easy and inexpensive to take.

For one, be careful about email. Why? Because most banking data breaches can be attributed to an email or “social engineering” attack that involves ransomware or malware. In a social engineering attack, the hacker uses email to “phish” for information from employees by fooling them into providing proprietary information such as network login credentials. They do this by creating emails that look official, replicating the exact format of the emails that employees regularly send and receive. Often the email will come from (or seem to, anyway) an individual within the company with some authority, lending even more credibility to it.

There’s a reason why phishing and social engineering are as prevalent as they are — they work. Whether it is the use of stolen credentials, phishing, misuse, or simply an error, people continue to play a very large role in incidents and breaches alike. In fact, the World Economic Forum Global Cybersecurity Outlook 2022 points out that a staggering 95% of data breaches are due to human error. What can banks do — at least as a relatively easy step — that can prevent the kind of cyberattack that leads to significant penalties, customer loss, and brand damage?  For starters, educate your employees, create and maintain a culture built around security, and lastly, put into place the processes that can help eliminate the likelihood of human error.

Of course, external bad actors and human error aren’t the only factors that contribute to data security risks. The infrastructure of today’s bank hinges upon a hybrid workforce across various locations, as well as cloud solutions such as DropBox® and OneDrive™. These quick-and-easy-to-implement solutions were largely put into place during the pandemic and were intended to help a virtual workforce communicate, organize, and stay productive — which they did. The unintended consequence, however, is that these individual locations, devices, and applications have exposed the bank’s data to even greater security and compliance risks by creating a multitude of “endpoints.” Each virtual office location and user constitutes an endpoint, with each endpoint serving as a “doorway” through which employees access corporate data. Unfortunately, these endpoints also serve as doorways through which cybercriminals can enter the institution’s network and steal customer data. For this reason, employees must be judicious in their use of unsecured applications or personal devices that fall outside the purview of the organization’s IT department.

As cyberattacks grow in volume and complexity, banks must give serious consideration to the new breed of cybersecurity technologies available to them, such as those powered by Artificial Intelligence (AI) and Machine Learning (ML). AI and ML are now, for many institutions, playing an increasingly critical role in securing data by facilitating the detection, protection, and response time to a cyberthreat. The reason is simple: AI technologies can either augment or supplant the “human touch” that can often be the cause of a data breach. For example, say your entire team is logging into the network for some type of online event or session. Sessions like these can be “hijacked” by a cybercriminal using stolen credentials. Not with AI, however. By supplementing the human verification process with AI-powered behavioral biometrics, each network user’s level of risk can be more accurately, and efficiently, assessed, and if needed, additional verification steps can be taken to secure the session. AI is beneficial in other ways as well. In the event of a successful attack, for instance, AI-powered solutions can significantly reduce identification and containment times, both of which cause costly downtime.

There is no doubt that cybercrime is with us for the long term, (which is why we’ve created a campaign focused on the upcoming Data Privacy Day on January 28). Securing data must be a priority for banks, and it can start very simply… with culture and training. Since the vast majority of data breaches can be attributed to human error, keeping your employees vigilant could save you from high-ticket fines, lost customers, and irreparable damage to your reputation.

About Bank Marketing Center 

Here at BankMarketingCenter.com, our goal is to help you with that topical, compelling communication with customers; the messaging — developed by banking industry marketing professionals, well trained in the thinking behind effective marketing communication — that will help you build trust, relationships, and revenue. In short, build your brand. 

To view our marketing creative, both print and digital – ranging from product and brand ads to social media and in branch signage – visit bankmarketingcenter.com.  You can also contact me directly by phone at 678-528-6688 or via email at nreynolds@bankmarketingcenter.com.  As always, I welcome your thought on the subject.

For years, community banks were well-positioned to offer commercial account holders both community and convenience. (And, as a result, they were also, perhaps, just a bit too comfortable). Small-business owners could bank at a community bank just as easily and efficiently as they could at a national bank. And, up until recently, community banks weren’t competing with disruptors who offered SMBs slick digital services such as two-minute online loan applications.  Well, needless to say, community banks are now living in a much different world; one where their commercial accounts are under constant threat from a host of competitors.

Today, the battle for these accounts grows more intense every day as competitors pursue SMBs with innovative, agile solutions in the areas of payments, lending, financial management, and more. Big tech disruptors like Square Banking, QuickBooks Cash, and Shopify Balance, as well as fintech innovators such as Kabbage, BlueVine, and Brex are wreaking havoc in the community banking landscape, working overtime to create a wedge between small businesses and their community banks.

Let’s face it, running a small business is challenging and the temptation to try new ways of doing things is, well, almost unavoidable. It doesn’t help community banks that there’s an explosive number of financial apps out there that are capturing the attention of small business owners… innovative (dare I say fun?) digital platforms that facilitate critical SMB processes, from making financial decisions and sending payments, to managing receivables and getting quicker access to cash. Sure, that personal relationship you have with your small business owners is worth something, but it’s not everything. 

Cash [flow] is king.

The main reason businesses fail is not because of poor products or bad service, but because of cash flow issues. And while working with a local community bank is almost always the preference of the SMB, like I said, a personal relationship is something but not everything. At the end of the workday, business owners want — and desperately need — a banking partner who can deliver the products and services they need to keep the wheels turning and the lights on. Whether it’s accelerated payments, increased working capital, or better financial management, you need to offer your small business customers the tools that enable a healthy, consistent flow of cash.

SMBs don’t work without working capital.

While we’re on the subject of cash flow, yes, cash may be king, but credit is certainly second in the line of succession. An important fact: It’s almost always the product that starts a new relationship between a bank and a small business. But that relationship can hit an insurmountable obstacle in just minutes. Studies reveal that today’s consumer has no patience whatsoever when applying for a loan and that includes small business owners.  According to meridianlink, a whopping 68% of consumers will never finish an online application for financial services. If a loan app takes more than just a few minutes to complete, applicants give up. This can be especially frustrating when it comes to SMBs and their funding needs as they often need capital not today, not tomorrow, but yesterday.  Community banks must balance fast financing with personal service or off that business owner goes to Lending Tree where, according to their Google ad, they can “get their small business funded fast,” with “$10K -$1M, next day funded!” 

According to the US Chamber of Commerce, 99% of all businesses in the U.S. – about 37 million – are SMBs.  And, according to meridianlink, 39% of those small businesses say community banks don’t understand them. What’s a community bank to do?  Make sure that your small business owners understand that you understand them!

As I mentioned earlier, a loan is almost always the product that starts (and can also go a long way in maintaining) a small business relationship.  It makes sense then, does it not, to get the message out there (and keep it out there) that when a small business needs financing that they should come to you for it, not a big national, Lending Tree, or Kabbage.  How do you do that?  With campaigns like these, that reinforce the fact that there’s more to running a successful small business than applying for financing online in less than 30 seconds. Campaigns that reinforce the fact that relationships matter, especially during tough times; of which, for SMBs, there are many. As always, I welcome your thoughts on the subject.

About Bank Marketing Center 

Here at BankMarketingCenter.com, our goal is to help you with that topical, compelling communication with customers; the messaging — developed by banking industry marketing professionals, well trained in the thinking behind effective marketing communication — that will help you build trust, relationships, and revenue. In short, build your brand. 

To view our marketing creative, both print and digital – ranging from product and brand ads to social media and in branch signage – visit bankmarketingcenter.com.  You can also contact me directly by phone at 678-528-6688 or via email at nreynolds@bankmarketingcenter.com.

The trademark on your bat, that is. What are we talking about?  Be patient, I’m getting to it!

Last week, we talked about the challenges that bankers seem to face on a continual basis. No matter what bankers do, it appears, it’s never enough. Then I thought, well, there are two ways we can feel about these continuous challenges; we can either let them defeat us or we can learn from them and achieve great things.

What makes the difference between the two? I think it depends on how you see the world. My theory is that we’re all better off when we have faith… and share faith. Every day, I encounter people who think that faith is just something we use to get to heaven. For some reason we forget that we should have faith in everything that we do. And, that we should also put our faith in others. By that, I mean that we should transfer the faith we have to those who are struggling to find their own.

Just look at what’s going on right now. Many people, many of them your customers, are going through tough times. The economy is struggling and so are they. And, as we all know too well, the holiday season can make this even tougher.

Yes, these are hard times for many and, sadly, the “experts” (so-called) are predicting that things will only get worse before getting better. This is where faith comes in; faith that no matter what the future holds that we’ll face it with optimism… making our best effort to, looking forward instead of back, turn those challenges into opportunities.  And in all of our encounters, personal and professional, to transfer our faith to others. Community bankers are in a unique position to do this, having personal relationships with individuals that are built on an aspect of their lives that can truly define the way they look at life: Their financial well-being.

Next time you’re meeting with a customer who’s struggling financially, think of Hank Aaron.

It was, I think, the 1958 World Series between the Yankees and the Braves, and Aaron was at the plate to bat. One of the game’s most iconic players, Yogi Berra, was behind the plate. As a catcher, Berra was well-known for doing his best to taunt and distract opposing team batters. The story is told that when Aaron took a practice swing, Berra told him that he was holding the bat the wrong way, that when held properly the logo should face skyward. This is, of course, something that anyone who has ever played Little League knows. When the first pitch came, Aaron connected solidly with the ball and rocketed it over the left field fence. He rounded the bases for a home run and as he crossed home plate, he paused to tell Berra, "I came here to play baseball. I didn't come here to read!” Much later, in an interview, Aaron said, "I always enjoyed coming to bat when Yogi was catching. He helped me relax, and I hit better. I had no problem talking to him. I just wasn't very interested in talking about the label on my bat. I just wished he had talked to me about movies, or fishing, or something else."

Sure, life requires hard work. In the case of baseball, it’s practice. But it’s also faith. Faith that we’ve put in the hard work and for that reason, we’re prepared.  We have what it takes to succeed, no matter the odds. So, next time you meet with a customer who is facing adversity and batting with the label down, encourage them to give the bat a spin and have a little faith. Who knows? With your help, they may just knock it out of the park.

As always, I look forward to your thoughts.

About Bank Marketing Center 

Here at BankMarketingCenter.com, our goal is to help you with that topical, compelling communication with customers; the messaging — developed by banking industry marketing professionals, well trained in the thinking behind effective marketing communication — that will help you build trust, relationships, and revenue. In short, build your brand. 

To view our marketing creative, both print and digital – ranging from product and brand ads to social media and in branch signage – visit bankmarketingcenter.com.  You can also contact me directly by phone at 678-528-6688 or via email at nreynolds@bankmarketingcenter.com.

Is it just me or does it seem like bankers can never get a break?

I mean, we just survived — more or less — a global pandemic.  We managed to get through the “innovate now or die” age of the must-have “digital transformation” … some more thoroughly, gracefully, and painlessly than others, but we got through it nonetheless. We’ve survived the IRS, the USPS, and the U.S. Congress (in this instance for actions they’ve both taken and not taken). New regulations, real and proposed — all of which involve placing additional burdens on bank resources, both human and financial — seem to be around every corner. Did I leave anything out? Probably. It’s impossible to keep track. 

In short, ever feel like you’re being constantly harassed?  If you do, I certainly understand. That’s because it seems to me that whatever banks do simply isn’t enough.

I got a bit fired up on the subject when I came across Forrester’s 2023 predictions for retail banking. Here’s just one cheery tidbit from the November 2022 report:

“After an already turbulent year, banks are bracing for tougher economic conditions and a possible global recession in 2023. Inflation has hit 40-year highs, interest rates are rising, yield curves are inverting, and the war in Ukraine continues.”¹

If that doesn’t warm your heart, there’s more… much more. How about Forrester’s prediction that Apple will “win deposits by capitalizing on the declining trust in banks”? Using their partnership with Goldman, you can (according to Forrester, anyway) look forward to Apple wresting the high-yield savings account business away from banks because, well, to put it bluntly, folks trust Apple and they don’t trust banks.

What else? Oh, a shortage of IT professionals. So, be prepared. Perhaps you might consider having some of your marketing professionals take a Google code writing course. Sorry, it’s really not funny, is it? Forrester says that “before the war in Ukraine, over 70% of business and technology banking professionals reported their organization would maintain or increase investment in banking, lending, and digital engagement platforms. But these plans are being derailed again; cost-cutting has become a priority for 73% of financial services firms. In 2023, the dire economic situation will force many banks to further reduce the IT spend allocated to transforming their applications and infrastructure.” At the same time, says Forrester, “banks will need modern cores that provide information in real time and allow them to configure products and services flexibly or rapidly — or lose out to more agile competitors.” I’m not an IT guy, but how do you do both? I.e., reduce your tech spend and modernize your core?

But, wait! There is a glimmer of hope for banks in the coming year. Green loans. Or is it really?  “Green loans will double from 2021 to reach $270 billion, supported by governments’ provision of low-cost financing for green technology and emission reduction projects such as the Inflation Reduction Act in the US. We will also see at least 100 banks globally launch carbon trackers, offering customers insights into their transaction-linked CO² footprint. Banks should avoid these, as they will be a wasted effort; trackers will fail to make a material contribution to financial services firms’ climate-related goals.” Well, I guess this is good news… but only if you’re not one of the 100 banks that will, apparently, be wasting their effort.

Sad to say, it seems like bankers must resign themselves to a lifetime of bad news. Like the old McDonald’s tagline says, “you deserve a break today.” You do. So, hang in there. I truly believe that what awaits us around the corner is what we believe awaits us, so let's look forward to better times and be thankful for, and proud of, what we've accomplished thus far. Granted, Bankmarketingcenter.com can’t help you with transforming your core or convincing the administration that sharing your customer information with the IRS is a bad idea, but we can help you with building your brand, your consumer trust, and your bottom line. Hopefully, that’s a bit of much-needed good news at a time when, unfortunately, good news for bankers seems to be in woefully short supply.  As always, I look forward to hearing your thoughts.

About Bank Marketing Center 

Here at BankMarketingCenter.com, our goal is to help you with that topical, compelling communication with customers; the messaging — developed by banking industry marketing professionals, well trained in the thinking behind effective marketing communication — that will help you build trust, relationships, and revenue. In short, build your brand. 

To view our marketing creative, both print and digital – ranging from product and brand ads to social media and in branch signage – visit bankmarketingcenter.com.  You can also contact me directly by phone at 678-528-6688 or via email at nreynolds@bankmarketingcenter.com. 

¹Forrester. November 31, 2022. “Predictions 2023: Banking”