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.”