Banks Need Explicit Accountability And Guarantees

Enhancing Trust

Take one look at Ben Carson, Donald Trump or Bernie Sanders’ poll numbers and you know things have changed in America. Straight talk, unabashed confidence and a “buck stops here” mentality plays well these days with the general populace and it is getting engagement. We pontificate that none of these presidential candidates would have ever stood a chance of even being seriously considered for a Party nomination, except for the fact that in this age of speed, complexity and short news cycle, clarity rules. We are not sure if this is a positive or negative development in society but it seems that you can say the most ill thought-out sound bites and as long as you say it in a short burst, with conviction, you will garner positive attribution.

 

Tapping Into The Trend

 

It is about time banks tap into this trend except do it with more substance. Community banks hold a rare position in society where we have the public’s trust, but the problem is that we squander this trust on confusing fee schedules, poor marketing and confusing products. If you doubt this, try explaining overdraft protection to a 24-year old or ask a business owner what their loan covenants are and you will likely evoke confusion, guilt and misunderstanding. In similar vein, most of the public still mentions “banks” when asked to explain the reason for the last recession. When it comes to clarity, banks are their own worst enemy.

 

It doesn’t have to be like that. Banks, with a little bit of effort, can easily make clarity their strategic advantage and in doing so, tap into the current zeitgeist.   

 

Clarity, Accountability and Guarantees

 

While we have discussed before the need to simplify products, product offerings and fees, banks also should consider offering accountability pledges and guarantees in order to improve the customer experience and increase product use (while also increasing lifetime value). Charles Schwab recently started to do this with great success and it is playing well (below).

 

The Accountability Guarantee

 

Banks could do the same in a number of consumer and commercial related areas. We have collected some ideas from the field and present 5 of the most popular areas to guarantee service and safety.

 

1.      Funds availability and transfer before certain cut-off times

2.      Overdraft availability and charges

3.      Online banking security

4.      Mobile banking security

5.      Identity authentication

 

It Matters For Product Adoption

 

Consider the number 1 and number 2 reasons for not adopting a needed bank product, such as mobile banking, peer-to-peer payments or online account opening is usually lack of product knowledge and fear over security. By increasing marketing spend, banks can help educate their customer base as to the use of these products, and then guarantee the product’s performance all while offering accountability guarantee.

 

By being clear, increasing education and then standing behind our products and services, banks will find that customer engagement increases, adoption goes up and satisfaction skyrockets. If we do this for the right product and services, banks can attract a younger demographic and serve to move their customer base into lower cost delivery channels such as mobile and online.

 

Get your management team together and brainstorm how you can integrate product performance guarantees and accountability pledges in important products and services. If you do, likely you will find that you’re your bank can tap into the same trends that are already heavily influencing the 2016 presidential election.