3 Tips to Position Your Bank as Your Community’s Trusted Financial Anchor
“Your deposits are safe here.”
These are the words of affirmation every customer wants to hear from their bank right now (and always).
However, given the recent closures of Silicon Valley Bank and Signature Bank, your customers may feel uneasy about the security of their finances and skeptical about the state of the banking system.
With that in mind, now is the time to reassure your customers that their deposits are safe with your community bank. It’s also an opportune time to assert yourself as a strongly positioned financial institution that has their best interests in mind, as well as the interests of the communities you serve.
Here are 3 things you can do right now to strengthen relationships with your customers during this turbulent time in the industry.
1. Educate your customers about FDIC protection tools.
Given the perceived uncertainty of the banking system, now is an excellent opportunity to educate (or refresh) your customers on the specifics of FDIC deposit insurance coverage and provide them with the resources to keep their finances safe.
Remember, your customers may not know they can increase their FDIC insurance coverage by using more than one ownership category for their accounts.
The FDIC insures up to $250,000 per depositor, per bank, in each account ownership category. So, for example, here's how Jim and his wife Tracy can insure $1 million:
- Jim sets up an account in just his name (insured up to $250,000).
- Tracy sets up an account in just her name (insured up to $250,000).
- Jim and Tracy set up a joint account (insured up to $500,000).
By utilizing single and joint ownership categories, they have FDIC coverage up to $1 million.
This may be eye-opening information for some customers. For more information on the basics of FDIC insurance coverage, you can refer them to the FDIC resources brochure.
Now, how can customers keep track of all their deposits to see if they’re insured?
The FDIC Calculator, “EDIE” (Electronic Deposit Insurance Estimator), is an online tool that can help customers determine whether their accounts are fully insured at each bank where they hold deposits.
According to the FDIC’s website, “EDIE lets consumers and bankers know, on a per-bank basis, how the insurance coverage and limits apply to a depositor’s specific group of deposit accounts (e.g., interest checking accounts, savings accounts, etc.) — what’s insured and what portion (if any) exceeds coverage limits at that bank. EDIE also allows the user to print the report for their records.”
Let customers know this tool is available and that you are willing to sit down and show them how to use it.
2. Reassure your customers that risk-management is always top priority.
Often, bank failures come down to compliance (or lack thereof) and poor risk-management.
Community banks operate and are structured differently than mega banks with a greater focus on providing traditional banking services in their local communities. The FDIC describes community bankers as ’relationship’ bankers as opposed to ‘transactional’ bankers.
Which means, according to the FDIC, that community banks have “specialized knowledge of their local community and their customers. Because of this expertise, community banks tend to base credit decisions on local knowledge and nonstandard data obtained through long-term relationships, and are less likely to rely on the models-based underwriting used by larger banks.”
Remind your staff to communicate this with your customers. Let them know that things are business as usual at your bank.
3. Use the strength of your customer relationships and be available.
A strength for community banks is that they have an infrastructure that supports instant contact and personalized customer service.
Make sure your customers know they can always call you and ask: “How do I do this?” And you’re going to be able to help them.
Another differentiator for community banks is your longevity in the areas you serve. Many community banks have a core group of people who have weathered the storm that customers count on.
Whether it’s a physical disaster, retail disaster, or financial crisis, your group has been around the block. You get it. You’ve planned for it. That should be reassuring for customers to hear.
At the end of the day, people just want to know that their money is safe and that they always have somebody to turn to.
Bottomline: Your strength and value as a community bank is that you make most of your loans to serve the neighborhoods where your depositors live and work. This helps these communities prosper and remain vibrant. Now is the time to remind your depositors that you have their best interests in mind and that keeping their deposits safe is your top priority.
Need help getting the right messaging out to your customers? Get in touch with us!