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6 steps to take away from extinction

Some common sense ways banks can meet modern customers’ needs

What can banks do to ensure they can serve the next generation? A new generation will take financial services into the future. In the new blog "Next Voices" a rotating group of bloggers of the younger generation will share what they are learning, thinking about, and doing. Proposals from guest bloggers are also invited. Please email What can banks do to ensure they can serve the next generation? A new generation will take financial services into the future. In the new blog "Next Voices" a rotating group of bloggers of the younger generation will share what they are learning, thinking about, and doing. Proposals from guest bloggers are also invited. Please email [email protected]

Recently an astonishing number of retail merchandisers announced bankruptcy and that their businesses were closing a number of store locations, or ceasing to exist entirely. Even profitable stores are choosing to close a number of physical locations. Some of these stores were retail giants with hundreds of store locations across the country, and others were smaller regional chains.

What killed them?

Research tells us that one of the primary causes is the rise of e-commerce, and another is the debt that retail stores already carried because of leveraged buyouts before the financial crisis.1. These factors, or a combination thereof, led to the collapse of retailers as sales shrunk and executives struggled to find money to keep their companies afloat. Even lucrative retailers are choosing to close unprofitable locations in order to reduce expenses.

That’s the conventional wisdom. I, however, think the answer is far simpler and disturbingly mundane: Lack of innovation.

Avoiding the “Sears effect”

Like retailers, financial institutions struggle to find a niche between traditional brick-and-mortar locations and the consumer’s shift toward online banking. Some consumers, especially millennials, choose to forgo traditional financial institutions entirely and use online-only banks or alternative financial services. As internet giants such as Amazon and Google break into the financial industry and increase the number of services they offer, traditional financial institutions must consider that they may begin to walk the road of recently departed retailers—if they haven’t taken their first step already.

You may think that adding products such as a mobile app, remote deposit capture, text and email security alerts, and financial planning tools will keep your bank in business, but if you’re only adding this technology because your competitors already did, you’re too late.

These products are important, of course, but your establishment is following in the footsteps of retailers, such as Sears, that failed to see the importance of developing a vigorous and unique digital presence early, before their competitors hooked consumers with their own technology innovations.2.

It didn’t help that Sears’ member rewards program and mobile app proved difficult to use and time consuming, the exact opposite of a millennial (and other generations) friendly and effective digital experience.

No magic formula

Sadly, there is no exact formula guaranteeing a successful e-commerce program, as well as flourishing physical store locations. I spent an entire day reading articles and watching videos, and each one suggested a slightly different approach. Some remained adamant that focusing on digital was the key, and others said the appearance and cleanliness of the store would win customers and encourage sales. Others said rearranging management and increasing their sales associates’ training, compensation, and benefits would help, and still more said retailers need to go “boutique” or engage in “retailtainment.”

A few said no solution to retailers’ slow death exists, and the companies populating the malls are doomed to fail and succumb to the online giants. Are brick-and-mortar banks going the same direction? I think Bill Gates summed it up best in 1997 when he said, “We need banking but we don’t need banks.”3. Doom and gloom, right?

As the malls’ number of vacant anchor stores like Sears and JCPenney increases, and the Aeropostales, The Limiteds, Abercrombie & Fitches, Rue21s, Guesses, Wet Seals, and American Apparels close up shop and leave malls looking like gap-toothed six-year-olds, it would be foolish to think that establishments clinging to the traditional ways will survive.

They’re won’t. People don’t need them anymore. Not-so-far in the future, consumers may decide they don’t need your bank anymore.

So, what do you do?

Quite literally, you’re going to have to go beyond the bank. Face it, consumers can go online to obtain products and services like checking accounts, savings accounts, credit cards, loans, wealth management, investment planning, and estate planning. They are most likely more convenient and more competitive than anything you could ever offer.

So, bankers have to think this through—use your noggin. What can’t online financial services do for consumers that you can? What do your customers need?

Like the retailers, your solutions will be different depending on the region you serve and your unique customer base. Here are a few ideas you might implement at your establishment:

1. Personal relationships remain important.

Yes, convenience is king and people like to do things quickly and easily on the web. But they still value your bank’s financial expertise and a personal, mutually beneficial relationship. Your customers are busy, though, and they don’t always want to make an appointment to come into the bank and talk to you.

Implement convenient, relationship-building technology such as video chatting and screen sharing so your customers can seek your advice and see your face from the comfort of their own home on their choice of device.

Additionally, some customers will undoubtedly appreciate in-home visits, an amenity which online-only financial services will struggle to replicate. Offer your customers the opportunity to have their personal banker visit their home to discuss financial opportunities.

2. Demonstrate your care for your community.

You’ve heard of GoFundMe, right? That website that helps people raise money for medical bills and other social issues?

Create a similar concept where members of your community—both your customers and non-customers—can donate money to an important cause by visiting the bank personally or contributing using the web—mobile apps, online portals, or P2P payments.

3. Consumers like to be rewarded for their loyalty—so do it.

If you haven’t already, consider implementing a rewards program to incent current customers to remain with your organization and attract new customers.

Reward them with cash back or a prize for using their debit card a certain number of times each month (Some vendors help you set up these types of campaigns. Ask your account rep!)

If a customer puts a certain amount of money in their savings account each year, give them another $50 as a gift for reaching their savings goals. Reward customers with gifts and prizes for using financial planning tools or choosing to speak with a banker about investment opportunities.

Reward your customers for engaging with your organization!

Don’t forget to tell your customers about all the awesome prizes and rewards they can earn, either. Send them a text message reminding them of their rewards if they haven’t used their debit card in a while, or if they haven’t contributed to their savings account. Drop them an email, send them a note with their statement (physical or e-statement). Just make sure they know how they can earn prizes.

4. Price match.

Does the competition down the street offer a lower account maintenance fee than you? Match it!

Lower interest rate on home loans? Match it!

Consumers like getting the most bang for their buck, and when you are willing to beat your competition, your customers will be more likely to stay with or switch to your organization.

5. Help your customers choose a product.

Have you ever shopped online—like at Amazon—and noticed the “Related to items you’ve viewed” or “More items to consider” sections?

Have you ever taken one of those quizzes that matches you to a certain service or product, like Ipsy, Winc Wine Club, or JustFab?

Choosing the correct financial product can be daunting for consumers, so create a quiz that helps them choose the product that will help them reach their financial goals.

If you don’t already (and if you don’t, yikes!), implement a marketing program that suggests products and services for your customers based on products they already have. The more products consumers purchase from you, the more likely they are to remain with your bank.

6. Don’t forget to read the reviews.

One of the aspects of online shopping that consumers love is reading the reviews. Do you have happy customers? I hope so. Urge them to leave a review of your products and services on your website. Other members of the communities you serve may see the name of their peers and be encouraged to give your bank a try.

So, what are you missing?

The retail landscape is changing, and so are the mechanisms of the financial industry, as is the mix of your potential customer base. Innovation is key. Don’t become so focused on one aspect of your bank that you fail to realize the other opportunities all around you.


1.Wolf Richter. “The crash of brick-and-mortar retail is only going to get worse,” Business Insider, last modified March 8, 2017, accessed May 9, 2017

2. BI Intelligence. “Sears tanked because the company failed to shift to digital,” Business Insider, last modified Aug. 26, 2016, accessed May 11, 2017

3. Jim Marous. “Is the Banking Industry Living on Borrowed Time?The Financial Brand, last modified July 27, 2015, accessed May 12, 2017

Kelsey Neisen

Kelsey Neisen is junior research associate at The Copper River Group, a community bank consulting firm based in Fargo, N.D. She graduated from North Dakota State University with degrees in Anthropology and Public History. In 2011, she won The Center for Public Anthropology Award for Excellence in Writing on Public Issues. Kelsey previously worked in a variety of historical institutions, including Bonanzaville, USA and the North Dakota State University Archives, where she focused on the preservation of historical documents and making them available to the public for research.

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