BankMarketingCenter

I just read in The Financial Times article, “Community banks fatten tech budgets to enhance CX,” that in its annual survey, Bank Director found that 81% of the respondents had boosted their 2022 tech budget, with the median increase being 11% from 2021. This is good news.

“Nearly half of the banking executives in the Bank Director survey said their most significant concern is that their internal technology operation was not making effective use of existing data. They also worry to a similar degree about their team having an inadequate understanding of how emerging technology could impact the bank and about a reliance on outdated technology.” This is not-so-good news. So, what’s a bank to do? According to the article, and the survey, “align technology with strategy” and “collaborate with technology partners.”

This is good advice. Banks manage mountains of data, most of it unstructured. Not to say that this data is worthless but, well, it is.  Unless, of course, it can be transformed into the kind of information that can drive insights and inform decision making.

Luckily, the technologies that can enable a bank’s digital transformation are out there and leaders are smart to be investing in the opportunities. Here’s the rub, though. Making a technology purchase, and I know this from experience, is no simple task.

Here’s what I’ve learned when it comes to buying technology.

Leaders in banking are committed, and have been for some time, to a “digital transformation.” This means managing their information more efficiently, securing personal data, meeting compliance requirements, fending off competitors, and beefing up both their employee and customer experiences. Studies have shown, sadly, that very few feel that they’re making progress in getting there. 

And that’s because very few understand what “fattening a tech budget,” and driving profitability with technology, really entails.

First, technology adoption is not simply adopting technology. Strange as it may sound, when a bank is looking to enhance its tech stack with some new solution, they tend to look at the process as, well, buying technology. It’s not. That’s because it’s far easier to focus on tech than it is on people. Why people, you ask. Because buying technology is not just a technology purchase. It’s an organizational change.

So, before you run off and spend your new fattened budget with some vendor who you think can solve all of your challenges, do a few, relatively simple things.

Figure out who your stakeholders are and involve them

A common misperception concerning stakeholders is that stakeholders are users. They’re not. A stakeholder is anyone in your organization who will be impacted by your decision.  (Importantly, it's critical to remember that this is not “your” decision. It doesn’t belong to any one individual, and that is where a successful tech adoption starts.)

Engage all stakeholders in building solid user stories

Every individual will be impacted by the new technology in a different way.  Here, user stories can be quite effective as they 1) articulate in a simple way the “who, what, and why” of the desired outcome, and 2) guide the buying team along their journey toward choosing the right vendor partner.  User stories should take into account:

• Who: who are the various users and what are their unique needs?
• What: what needs to happen to achieve the desired outcome? What technical capabilities are required? What processes are needed, or need to be changed?
• Why: why is this change a priority? Why is it important to the business as a whole?

Engaging all stakeholders is critical here, as those who are not fully involved often fail to understand the importance of buying into the change or what their part should be in making the change successful. They simply understand that a change is happening “to them,” and not “with them.” Instead, they need to clearly understand the purpose of the investment, why change is necessary, how it aligns with your bank’s strategic business goals and how it will achieve an overall enterprise-wide, net-positive gain. 

Socialize the change with constant, consistent communication

Remember. An organizational transformation does not necessarily mean all those involved will benefit to the same degree. Some users will benefit, while others may not. This is further complicated by competing uses and priorities, varying degrees of technology knowledge, and differing views of the opportunities and risks. Socializing the change is not easy, but in the end, you’ll save time and money. It’s a known fact that adoption and productivity rates increase when employees are involved early on in the discovery and conceptualization phases of organizational change.

Make sure everyone is informed and aligned.

Failure to achieve alignment on goals – across the entire business – can lead to costly and disruptive missteps. For example, what happens when you introduce a content management system (CMS) for marketing only to discover later that it will not integrate with your customer relationship management (CRM) function?

And that means alignment on measures of success.

Arbitrary definitions of success can and will hinder progress. What is considered a win? Automating a process by 50% could be deemed a success by some, while others were aiming for 80%. ROI, key to measuring the value of any tech implementation, is nearly impossible to calculate when stakeholders have varying definitions of success.

Avoid SOS (Shiny Object Syndrome)

It’s been called SOS and the cause is clear; breakthroughs in technology are occurring on an almost daily basis. Chasing bright shiny objects can lead to continual comparison and fear of missing out. What’s the best way to avoid SOS from the start? Set clear, measurable, agreed-upon, and achievable goals. Then, stick with them!

Put your user stories in front of tech vendors

Much can be learned from vendor collaboration, such as insights gained from past engagements. Ideation workshops, for example, can be useful; not only validating the vendor’s expertise, but also helping you to identify any unrealistic expectations or false assumptions. Now is the time to ask vendors to show you how their solutions deliver against your needs through detailed demonstrations, not simply answering “yes or no” questions.

Take the time you need to get it right

As financial institutions continue to accelerate their technology investments, it’s important to remember that purchasing technology requires a strategic, collaborative approach. Is it a bit time consuming and labor intensive?  Perhaps. But it is definitely worth the time and effort it takes to find the technology that is right for your bank and its digital transformation.

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 thoughts on the subject.

Hello. If this blog was written by an AI-powered writing assistant instead of a real human being, would you know? And, more importantly, would it make a difference to you?

Back in January, someone here (not sure if it was me or my robot writer) penned a blog on AI-generated content. Of course, since then there’s been a whole lot of “chatGPT” (pun intended) about AI; some pointing out the potential world-ending danger of it, others pointing to the amazing feats it can perform.

The contradictory nature of any discussion about AI was reinforced for me by a recent issue of American Banker. It was a bit ironic — and not just a bit comical — that on the same page where I found the article titled “How would new regulations on advanced AI affect banks?,” there was a link to another article titled: “Regions Bank using IBM’s Watson to answer customer questions.”

Another irony, I thought, was the fact that IBM's chief privacy and trust officer, Christina Montgomery, was serving on the panel of experts that met with members of Congress in its hearing on regulating artificial intelligence, while Watson was just next door, so to speak, serving Regions Bank.

In the article chronicling the Congressional hearing, I read that “the hearing focused largely on the impacts of general-purpose AI on society at large, and risks associated with leveraging the technology to advance misinformation campaigns during elections, to manipulating or anticipating public opinion and the risks the technology poses to children.” By contrast, the Regions Bank article extolled the virtues of AI and how “an AI virtual assistant allows customers and agents to quickly find answers to 283,000 questions a month, with a 95% accuracy rate.”

Is it surprising, then, that Congress has no idea which end is up when it comes to AI?  Hardly. And not just Congress, either. Even the folks who supposedly “invented” AI don’t really know 1) how it happened 2) what it does, and 3) what the future benefits and/or dangers of this technology really are.

Amidst all the confusion, what does this have to do with me as a bank marketer, you ask. Well, it has a lot to do with your content which, in turn, has a lot to do with building your brand, staying competitive, and keeping customers. In short, growing revenue.

Search Engine Optimization (SEO), as you know, now plays a more critical role than ever in the marketing content that you create. And Google, as you also know, plays a critical role in determining how and when that customer engages with it. It’s important, then, to keep an eye on Google and keep abreast of the changes they may be making to how they rank content in user searches.

If you’re a content marketer — and you better be — those changes involve algorithms, which have a profound impact on the type of content you distribute and how it is viewed. For years, and Google would be the first to admit it, their content ranking algorithm was less than perfect and, as a result, fairly forgiving. As a result, when it came to optimizing content such as web sites and web-based articles, blogs, white papers, infographics, and ebooks, etcetera, marketing content developers could get away with things. They’ve been able, for instance, to get away with optimization tactics such as keyword stuffing and link farming (a set of web pages created with the sole aim of linking to a target page, in an attempt to improve that page's search engine ranking). In short, writing to the search engines instead of the human being. As of this year, however, the ability to get away with “faking” SEO is no longer an option. This is good news for bank marketers who adapt, bad news for those who don’t. And, not surprisingly, Google continues to get smarter over time; artificial intelligence can do that.

Banks need to keep getting smarter, too; about creating optimized content that can truly leverage what Google is prioritizing when it comes to the SERP (Search Engine Results Page) and the recent algorithm updates. This one in particular: The Helpful Content Update or HCU.

Here is what Google’s HCU is intended to do; validate and rank content with a greater emphasis on author authority… and trust. And they’re doing this not only by validating the trustworthiness of sources/authors. So, moving forward as a content marketer developing content for the web, Google suggests that, in order for that content (site page, ebook, whatever) to be recognized as valued content, you should position your author as a subject matter expert, ideally linking the blog to their LinkedIn page where the reader can learn more about the author’s experience and industry credentials.

Google is also concerned about the growing popularity of  AI generated content, via providers such as Chat GPT and Longshot. Industry experts theorize that it won’t be long (potentially) before the internet is flooded with AI content, i.e., websites and blogs crafted by writing “bots.” Google’s updates are the company’s way of protecting what it views as legitimate content, making sure that the content it ranks high in SERPs is developed by individuals who are truly qualified to do so; subject matter experts in their field and not “AI writing assistants.” Google even offers an “AI content detector,” a Chrome extension called CopyLeaks®, that can “verify what content was written by a human or an AI chatbot.”

So, as you move forward with content creation — keeping in mind that SEO plays a critical role in the effectiveness of that content — it will pay to also keep in mind that Google has an ever-watchful eye on the web.  Remember: How, when, and even IF your content will be viewed online is in Google’s hands, not yours. 

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 thoughts on the subject.

Let me start by saying, simply, WOW. This article, late last month in MONEY, is downright scary. “Study Finds Twitter Chatter Fueled SVB Collapse — and Other Banks Are at Risk.”  Like many of you, I’ve been in this industry for quite a long time, so, I don’t scare easily. But the SVB collapse, which has now earned the title of “the first Twitter-driven bank run” gave me chills. In the “good old days,” like when George Bailey ran the Bedford Falls-based Bailey Bros. Building & Loan, you knew a bank was in trouble when customers lined up at the door to withdraw their cash; the longer the line, the deeper the trouble. Nowadays, withdrawing money — along with a host of other transactions, of course — doesn’t require standing in line. In fact, it doesn’t even require visiting a brick-and-mortar branch.  As we all know, for better or worse, today’s banking transactions are routinely made from a mobile phone… and in less than a minute.

It seems that SVB went bankrupt the same way that Ernest Hemingway’s character “Mike” did in The Sun Also Rises. When asked how it happened, Mike responds: “Two ways. Gradually, then suddenly.”

What caused the “gradually” in SVB’s collapse? With Federal Reserve interest rate hikes — 10 of them since the start of 2022 — a chilly environment for IPOs, and a tough economic climate, many of SVB's startup and tech industry customers were already motivated to withdraw needed funds. Then came the “suddenly.”

On Wednesday, March 8th, Silicon Valley Bank was a well-capitalized institution seeking to raise some funds. Within 48 hours of announcing to investors that it needed to raise $2.25 billion to shore up its balance sheet, a panic ensued — induced, some claim, by the very venture capital community that SVB had served — which led to the 40-year-old institution’s demise. Just a short time ago, when only two US banks had collapsed (now there are three), CNBC reported that “even now, as the dust begins to settle on the second bank wind-down announced this week, members of the VC community are lamenting the role that other investors played in SVB’s demise.”¹

What role was that? Numerous VC funds, including major players like Founders Fund, Union Square Ventures, Pear VC, and Coatue Management, had advised companies in their portfolios to move their funds out of SVB “to avoid the risk of being caught up in the potential failure of the bank. In light of the situation with SVB that we are sure all of you are watching unfold, we wanted to reach out and recommend that you move any cash deposits you may have with SVB to another banking platform,” said Anna Nitschke, Pear’s chief financial officer, in an email to founders obtained by CNBC.”²

Bad news coming from VC firms in the tech capital of the U.S. travels fast and that news quickly snowballed into a stock rout, sending customers scrambling for their mobile apps and the “withdraw” button. Of course, the bank was then forced to sell investments to cover the demand... and, at a tremendous loss. Now, here is the kicker. “Word of those losses traveled quickly,” according to Reuters, “and spooked depositors withdrew $42 billion from the bank in just 24 hours. Many blamed the speed and intensity of online chatter about SVB’s weakness for the bank’s swift demise.”  Talk about “speed and intensity” … just multiply that by 450 million Twitter users.

The speed and intensity of the news around SVB’s collapse is, understandably, a concern. In mid-April,  a group of university professors co-authored “Social Media as a Bank Run Catalyst,” a treatise on the cause and effect of social media in the case of SVB that argues that greater exposure to social media amplifies bank run risk and warning that other banks could face similar risks. Here’s the first sentence in the Abstract: “Social media fueled a bank run on Silicon Valley Bank (SVB), and the effects were felt broadly in the U.S. banking industry.”³ As I said in the beginning… scary stuff. 

Of course, during all the media hype and excitement about how this failure portends a global financial crisis, few were paying attention to the more reasonable voices in the banking industry. Their voices were all drowned out by those millions of Tweets spreading fear. 

As Alexander Yokum, an equity research analyst at CFRA Research, warned in the MONEY article, “the fact that people can communicate so much more quickly has changed the dynamic of bank runs and perhaps changed the way we have to think about liquidity risk management. The number one driver right now is fear, not fundamentals.”

And that fear seems to continue to hang over the banking sector like a dark cloud… at least, for now. Over a month after the collapse of Silicon Valley Bank, some mid-size bank shares lost half their value, others were down well into double digits. A few share prices soared recently, then collapsed again. Great if you love roller coasters.  And this is at a time when, with rising interest rates, banking sector investors were anticipating a pretty good return.  Why the rough waters? “We believe regional banks are suffering from a GameStop-like moment where misinformation circulating on social media is fueling stock price declines that threaten funding and solvency,” Jaret Seiberg, financial services analyst at TD Cowen Washington Research Group.⁴ There it is again. Social media.  If only positive and accurate information traveled as fast as the negative, inaccurate stuff.  Until that happens, we ride that roller coaster. Buckle your seatbelt and hold on tight.

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 thoughts on the subject.

¹CNBC. Here’s how the second-biggest bank collapse in U.S. history happened in just 48 hours. March 10, 2023

²CNBC. VCs urge startups to withdraw funds.  March 10, 2023

³Cookson, J. Anthony and Fox, Corbin and Gil-Bazo, Javier and Imbet, Juan Felipe and Schiller, Christoph, Social Media as a Bank Run Catalyst April 18, 2023

⁴CNN Business. Why bank stocks are so unstable. May 9, 2023

Newly released Federal Trade Commission data shows that consumers reported losing nearly $8.8 billion to fraud in 2022, an increase of more than 30% over the previous year. Who are some of the most inventive fraudsters? P2P payment scammers. 

Peer-to-peer (P2P) payment services and money transfer apps like Cash App, Venmo, PayPal, and Zelle, are becoming more popular because of their convenience and, for the most part, their reliability. Users can add funds to their account by linking it to an existing checking account or debit card. This allows funds to be transferred directly to the user’s bank account. It also allows funds from the user’s bank account to be transferred to their payment app. Today, according to LendingTree®, more than 8 in 10 consumers have used a P2P payment service to make a financial transaction.

Sounds good, doesn’t it? Well, not always. With more than 2 billion people worldwide using P2P payment services, cyber criminals have developed plenty of ingenious ways to profit through scams. Here are a few of the more popular ones making their way around P2P services:

• Posing as customer support: Scammers take advantage of users by posing as employees and reaching out via direct message or phone.
• Offering expensive goods: Scammers offer expensive — but fictitious — goods or services in return for payment. It’s a scam.
• Random deposits: You wake up to find an unexpected deposit in your account and the sender, who sent it by accident, would simply like it returned. This, too, is a scam.
• Claim your prize: Users may be contacted with claims of fabulous cash prizes. But in order to receive the prize, they must first send money. Guess what? Scam.
• SSN request: Anyone asking for a user’s Social Security number is almost certainly a scammer. Never give anyone your SSN.
• Government relief payments:  Scammers pose as government agents, offering the promise of cash in the form of a government grant or relief program. This type of scam can look quite legitimate. A dead giveaway?  You’ll be asked for personal banking information.
• Cash flippers: Scammer claims to be able to “flip” your funds. Cash flipping scammers will usually ask for a small sum, something to the tune of $5 or $10, which they will claim they can flip into multiple times the amount. Of course, they never do.
• Bad romance: Scammer reaches out with romantic promises of expensive dates and lavish gifts, but there’s a catch. You have to send money first. Maybe for plane fare to meet in person. In any event, it never happens.
• Phishing emails: A classic scam, phishing scammers will send a legitimate-looking email to trick you into verifying your login credentials or to click a malicious link that steals your information.
• Fake security alerts: Similar to phishing emails, some scammers may send a fraudulent email claiming that your account was compromised, and your personal information has been leaked. Scammers often include links to fake websites in emails that prompt you to change your login credentials. Never share your login credentials.

Unfortunately, P2P scams are on the rise and they’re hard to stop. And there’s a very good chance that many of your customers aren’t fully aware of the dangers; which is why we’ve created these Scam Alert campaigns. Use your social media platforms to get the message out to your customers that scams are very real, very dangerous and, if they become a victim of one, very expensive.

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 would love your thoughts on the subject.

With all the fuss about Silicon Valley Bank, Signature Bank, and First Republic, i.e., how did it happen, who is at fault, what new regs may or may not need to be put in place, etcetera, I’m convinced this is actually a great opportunity for community banks. After all, community banks are unique. 

I’m sure that there are folks out there right now who are wondering… is my money safe in my local bank? So, I did a bit of web surfing, just out of curiosity, to see what the worldwide web has to offer in terms of why community banks are a great place to do business and found this;  an ICBA-sponsored website, “Bank Locally.” 

It’s a terrific little site and if you haven’t been on it, you really should check it out. I’m also thinking that mentioning this site in your social media marketing might not be a bad idea. It offers great blogs on the advantages of working with a local bank and, given the somewhat turbulent times that we’re currently in concerning bank failures, is a great reminder (via a recent blog, for instance) that a customer’s money is always safe at a community bank.

The site is also a great resource for small businesses which, as we all know, are the backbone of our economy and rely heavily on community bank support and are terrific community bank customers. And, there are lots of them. According to the U.S. Chamber of Commerce, there are approximately 34 million small businesses in the U.S. and that number seems to be on a pretty significant growth trajectory. 

“In 2021 alone, a record breaking 5.4 million new business applications were filed, and nearly as many (5.1 million) were filed in 2022.” In addition, these small businesses are credited with creating nearly 2/3 of the new jobs during that period. And younger generations, Millennials and GenZers, are far more interested in starting their own entrepreneurial enterprises than their parents were. Which means, of course, that community banks have a tremendous growth opportunity with younger customers… provided they can not only provide the personalized service of an in-branch visit (for which they’re known), but also offer that younger customer the online and mobile-app banking experience that meets their needs. Not easy, granted, when you’re up against nonbanks that offer slick digital services, such as two-minute online loan applications, but it can be done.

I believe that the silver lining to this bank-failure cloud is this: An impetus for the smaller bank community to be more aggressive with its messaging; a chance for smaller banks to “state their case,” as Rebecca Romero Rainey did recently in an NPR interview:

“NPR: Now, this week, we've seen the heads of regional banks trying to push back against negative sentiment. They're reaching out to their customers directly, according to Rebeca Romero Rainey, who's the CEO of the Independent Community Bankers of America. And Rainey says this is their message.

REBECA ROMERO RAINEY: Take a breath. Let's have a conversation. Let's focus on the facts.”

Ms. Romero Rainey also contributed to The Hill just the other day, with an opinion piece entitled, Main Street banks shouldn’t pay for Silicon Valley speculation. In it she says:

“SVB and Signature Bank were unlike many other banks, and absolutely nothing like the local community banks that small businesses across the country depend on for capital. The failure of these institutions presents an opportunity for community bankers, who are ready, willing and able to answer questions about the latest developments at larger financial institutions. When depositors ask whether they could be exposed to the risk and mismanagement that took these two firms down, the resounding answer from community banks is no.”

And, just a few weeks ago in the New York Times, Janet Yellen also made clear that while banks of all sizes are important, “smaller banks have close ties to communities and bring competition to the system. ‘Large banks play an important role in our economy, but so do small and mid-sized banks,’ she said. ‘These banks are heavily engaged in traditional banking services that provide vital credit and financial support to families and small businesses.’

As Ms. Romero Rainey recommends: “Let’s have a conversation. Let’s focus on the facts.” She’s right. Now is the time to do just that. Get the facts out there, for both your personal and commercial customers. You can even use the social ads we’ve been working on, like these below, to help you tell your story!

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 would love your thoughts on the subject.