Excellent customer communication is the pinnacle of community banking. However, a new precedent for speed and digital offerings for your commercial customers has been set since the onset of the Paycheck Protection Program. Will people want to go into a bank branch to apply for a commercial loan when they were able to carry out the entire PPP loan process digitally? Now that these digital expectations have been set, there’s no going back. Bankers can’t revert to doing things the same way they did before the pandemic. It’s just not an option.
As the banking space grows increasingly digital, you are no longer just competing with the bank down the street. It’s not just large banks vs community financial institutions… there are neobanks or “challenger banks,” digital payment solutions branching into banking, and other fintech and digital players vying for your customers. Set yourself apart from the competition by taking what you’re already good at and doing it even better.
Commercial lending is a key player for many community banks. Ensuring you’re meeting the needs and demands of these customers can be vital to your banks’ success. There is often the misconstruction that adopting technology in your bank will take away from the “authentic customer communication” selling point. But what if I told you that you don’t have to sacrifice human touch to adopt digital commercial offerings? You can use banking technology to your advantage to improve customer communications and stay at the top of your game.
The Starting Point
When bringing technology into your customer communications, start with the question, “what are we not doing?” Sending emails and making phone calls is expected, but what more can be done to improve communication without overloading your staff?
What Does Personalized Really Mean?
Sending automated reminders makes half of the community bankers I know cringe at just the thought. But consider the content and value of each email you’re sending. When I get an email from my banker, 90 percent of the time it’s the loan assistant asking for a tax return or another needed document. The loan assistant is just going through a list and checking off boxes, then sending a 2-second generic email. That’s not what personalized means.
I am by no means recommending going fully automated and establishing a 1-800 number for customers to call. That’s not community banking. But you can have the best of both worlds-- set automatic reminders that notify the customer if you need something from them, and keep calling your customers and asking them to lunch to discuss business.
You still want to check in on your customers regularly. Once you automate generic reminders, you can fill that time by sending authentic check-ins. How about something personalized to their latest transaction? Authentic for a banking customer is checking in on them after getting a new loan or line of credit, asking how things are going or what you can do to help. Call them about something you did for them or something you think you can do to help. Maybe just write a card when they’re one year in on a 5-year note. Think of ways that you can send personalized communications that aren’t automatic or impersonal. You obviously do not need technology to write a note, but utilizing technology will help you keep track and get regular reminders of these milestones and have easy access to what’s going on with your customers.
If you know your customer so well, why do you keep asking them for the same information over and over?
I hear a lot of customers complaining that their banks ask for things they already have. How many times does a customer have to submit a driver’s license, or when a customer applies for something new and you ask for three years of tax returns, but you already have two. We all know it is not possible for a lender to remember every document they have for every customer, but the customer remembers. Do not send a blanket email listing the needed documents! Look at their accounts first. If they just did a loan six months ago, you may not need anything from them. When you ask the customer over and over for items they’ve already given you, you’re communicating that you don’t actually know them.
Be Quick to Provide Answers
Having a digital option for status updates is so much more efficient than staffing a call center just to answer questions about loan status for customers. For small business owners and other customers, applying for a loan can be scary even if they’re well established. A lot of community banks lose smaller business clients to crazy loan systems with insane rates simply because it’s a fast answer. Once they know if a loan is approved or declined, they know what to do next. It’s that uncertainty during the waiting period that is stressful. Having an automated tool, a secure portal, to check the status at any time of day will help ease customer’s minds during that waiting period.
Even with all of the digital advancements and changing customer expectations, I don’t think the characteristics that set community financial institutions apart in the banking industry will change. Community banks have always prided themselves on good relationships with customers and have typically always made approval decisions faster and with more personal consideration than larger banks. Those two factors were what made community banks shine during PPP and I think they will continue to be the cornerstone of community banking going forward.
Your competitors may be fast, but they will struggle with relationships. They can and will fake it, but community banks already excel at relationships with customers and people can tell the difference. Let’s take our strong points and combine them with the technology we need to make us fast – fast to respond to inquiries, quick to answer questions, quick to make approvals, fast to give alternatives, be the first one there to help. With the right blend of technology and good relationships, your community bank can remain in the game.