When Bank of America phased out its no-fee “eBanking “ checking accounts in January, the media was quick to jump on the story. The move was portrayed as “sticking it to the poorest folks” who struggle to maintain minimum balances or don’t have jobs that generate regular direct deposits.
It was such a controversial move, a petition was launched to get the bank to reverse their decision. Well over 130,000 people have signed it so far, which may be a futile effort but you can bet a few of those have switched banks.
But no matter the reasoning behind the decision, the move will cost Bank of America in the long run — and community-based banks can benefit.
Bank of America’s Invisible Customer
According to Paul Schaus, president and chief executive of research firm CCG Catalyst, “Millennials want their banks to advise them. They want advice on how much to save and budget. Banks need to redefine the relationship they have with customers.”
A Bank of America eBanking account was free as long as account holders did all their banking online or via mobile. So the trade-off, presumably, would be that customers never darkened the door of a bank branch — and that’s what Bank of America preferred for these lower revenue-generating customers.
Theoretically, a customer would never need to make human contact with a banker. So it’s no surprise that these customers would easily switch banks after losing their eChecking accounts. After all, you can’t really miss a relationship you never had.
The Content Conundrum
Big banks like BofA spend hundreds of millions of dollars on advertising and content to engender customer loyalty, particularly on that oh-so-fickle Millennial demographic. But those customers aren’t enamored of big, impersonal brands, and this move only serves to drive them further away.
Not everyone with an eBanking account was poor, and many of them will soon be looking for loans, mortgages, and other banking products. Forcing customers to switch to a $12 per month checking account might boost Bank of America’s profits, but at what cost to their long-term brand loyalty?
You’re competing with the big players, credit unions, and even niche online-only banks like Ally. But smart branding, messaging, and content will put you on top.
The Opportunity for Community Banks
Community-based banks can develop deep relationships with their customers and their neighborhoods while recognizing the fact that increasingly, millennials may prefer a more digital, and less in-person banking experience.
- A robust content marketing program that positions your bank as a local expert can be the key. Community banks know the unique needs of the customers and local businesses in its vicinity. Tailor your bank’s brand promise and key product portfolio to what you know your customers want — with the personalized service large banks can’t offer.
- Social media, direct mail, even local radio and television advertising keep your bank’s brand top-of-mind with messages continually refreshed to reflect what’s happening in the local community and the greater economy.
- Your bank is likely heavily involved in the communities you serve. Make sure everyone knows via email advertising and local media outlets. Community outreach and activism, plus employees committed to superior service will pay dividends (pardon the pun) in the long run.
- While millennials comprise a key, growing demographic, you need to develop a singular tone and voice that will appeal to all customers — from the ones with their eyes on college savings plans to the ones currently enjoying retirement.
- Most importantly, your marketing and product portfolio must align. Promises made must be promises kept. Bank of America decided to nickel-and-dime the very customers who can least afford it. They don’t walk the talk. But you can.
Does it sound like a Herculean task for a small bank? It doesn’t have to be. Any customer that’s currently banking with a big, impersonal bank is one you can easily poach.
Talk with us and we’ll give you the guidance and tools so your bank can strengthen customer relationships of all kinds.