piggy bank

The banking industry is at a decisive inflection point. And recent events have only sustained a feeling of unfairness and disillusionment with big banks in particular. The result: trust in banks at an all time low, and more people are open to switching institutions than ever before. A recent Gallup report, Rebuilding Trust in Banks analyzes customer confidence in their primary bank in the below graphs.

 

 

In these shifting market dynamics, there is a key opportunity for smaller banks that are paying attention. Firms that focus on engaging customers in a meaningful way are more likely to win over switchers and, more importantly, hold onto existing clients.

According to another recent Gallop report, Where do People do their Banking?, there are four main dimensions through which a brand can achieve and measure engagement: confidence, integrity, pride, and passion. It is important to note that the report is suggesting engagement is created when brands are able to evoke these emotions. In other words, it’s not enough to say you have passion and pride and integrity. You need to show it.

Recent events have shown banks violating this sense of confidence and integrity. For example, when Bank of America tried to implement a $5 monthly debit card fee, customers were not only outraged, they felt betrayed. Although BofA is a banking giant, there was a disconnect between what was said and what was done that caused customers to re-evaluate their perception of the brand. As a result, the bank lost a lot in the way of customer loyalty and engagement.

So, how can brands evoke feelings of pride, passion, integrity and confidence? The path to engagement begins with a fundamental question: why should customers care? To answer this question, we recommend starting with the foundation: the corporate brand. A strong corporate brand instills trust and loyalty – something clearly lacking in the financial services industry as a whole. Now is the time for banks to take a look inside with a fresh perspective and re-evaluate the way they define themselves and tell their story.

To evoke feelings of pride and passion, a bank’s brand must mean something to customers. The report notes, “In banking, trust is more about what a bank is—how customers feel about banking there—rather than the products the bank offers.” Herein lies the real opportunity for smaller, regional and community banks. Banking giants like Bank of America or Chase have the advanced infrastructure necessary to credibly stake claims on products and services. However, for smaller banks that can’t compete with the variety of locations, low ATM fees, and massive advertising budget, an authentic story, built around a solid brand foundation, can help to fill the gap.

Loyalty cannot be bought, and with this thought in mind, smaller banks must put their focus on evoking pride and passion through their brand. Banks that are able to engage customers in this fundamental way stand the chance of regaining the loyalty and trust of their customers, employees, stakeholders, and hopefully the public as a whole.