Can Bankers Heed Obama’s Call for “Change”?

  • JJ Hornblass
  • November 6, 2008
  • 1

What do 64 million people say about banking?

A lot, in my opinion.

The 64 million people who voted Barack Obama into the presidency on Tuesday pulled the lever for “Change.” It turns out that banks, too, have the opportunity to tap into that Change. Here’s how.

What “Change” meant in the Obama runup to office was a direct connection, a “you” in the national movement called Obama for President. As Obama said the night before the election, “The change we seek will not just come from government alone, it’s going to have to come from each of us; each of us has a role to play.”

And 64 million people wanted that role, on some level. Obama was able to engage people on a one-to-one level — “you” — and not just with words. His campaign used technology to create local nexuses of engagement. Email, text messaging, blogs, online groups all played a role. The campaign’s 500,000 volunteers become evangelists for the Obama movement. And it worked. The message for banks is Americans want engagement. They want a one-to-one relationship, and this is particularly applicable to commercial banking. Invariably, major banks push products to customers. Take this credit card. Buy this commercial loan. But except for large commercial clients just short of the Fortune 500, most banks do not engage their customers beyond pushing products to them.

It shouldn’t be that way. Any bank with a “customer service representative” is totally missing the point. Bankers with a capital B can — and should because of technology — go back to what they once were, members of a community, hubs to a local economy’s spokes. Today’s bankers should manage portfolios of clients, using social networks to create “pods” of business. Post a Facebook page, include your clients as “friends,” foster links between clients, particularly small businesses (and facilitate the financing and/or cash management of such links). There is no reason why Bankers cannot do what Obama’s volunteers did: connect with people.

There are challenges to this strategy:

1) Who Owns the Relationship? We are advocating a Banker with control over clients. That might be a scary thought for bank management, but we see this as a fundamental shift that banks need to make.

2) Compliance. Less of a challenge. Technology and solid training should keep Bankers in check.

3) Compensation. How do you incentivize Bankers to engage their clients? How do you quantify their efforts when revenue is not always directly generated from their actions? This is a tough one. We are still thinking about this. Ideas are welcome.

4) Product Matters. If you are going to engage a customer base like this, you had better offer them services that are truly to their advantage. This is a problem for some banks that offer products with less-than-beneficial stipulations, such as high concentrations of ancillary fees. If a customer knows his Banker, you can bet that Banker will get an earful when sold a less-than-advantageous product. Shifting to a Banker paradigm requires a commitment to wholesome products. It can be done.

Barack Obama’s victory was nothing short of remarkable. He brought “Change” to a nation. Banks can “Change,” too. Or, in campaign parlance, “yes we can.”

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JJ started the first iteration of Bank Innovation back in 2007, and has been working on it ever since. He also serves as President & Chief Executive Officer of Royal Media, Bank Innovation’s parent. He founded Royal in 1995 and oversees all aspects of the New York-based diversified media company. Prior to forming Royal, JJ was on the editorial staff of American Banker, the daily newspaper, and worked as an editor of a business magazine in Hong Kong. As a reporter and editor, he has won journalism awards from the National Press Foundation, Newsletter & Electronic Publishers Foundation, and the Reader’s Digest Foundation. He has a BS in Economics from Yeshiva University and a Master’s from the Columbia University Graduate School of Journalism. He was also a Fellow at the University of Wisconsin-Madison Graduate School of Banking. He lives in New York City with his wife, two daughters, and son. He counts among his accomplishments one New York City Marathon, two New York City Triathlons and the 2010 Father’s Day 5K, the first race he ever ran with his daughters. He can be reached at or 212-564-8972.

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One thought on “Can Bankers Heed Obama’s Call for “Change”?

  1. Tom, many thanks for your comment. It’s excellent.

    First, I do, in fact, mean that ” banks should go back to what they once were.” But what I was trying to say (poorly, it seems) is that to do that, banks can use many of the same technology-driven efforts employed by the Obama campaign. Much as Obama’s volunteers used technology to reach out to people, so too can bankers use technology to reach out to people and “go back to what they once were,” integrated members of economic communities.

    (I will say, that I do think there are some additional parallels between Obama’s campaign and banking, in that banks can — at least one some level, although certainly not to the degree Obama did — tap into a want. That want being financial security. But that’s not really my central point, which is: get closer to your customers through technology and be a Banker, not just a customer service rep.)

    Your experiences as a banker are interesting, Tom. I can understand how your clients preferred to see “less” of you. But my gut tells me that today there are commercial customers who would appreciate a Banker who can foster their company’s growth, and not just by making sure all the paperwork is done right. I am certainly one of those commercial customers.

    Finally, the email from your UK friend was great. All I can say is, I hope that research turns out to be correct.

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