Hey, there, Mr. or Ms. Utah Banker. Think you've got enough to worry about these days what with Congress rewriting the banking laws, credit unions eating your lunch and technology changing the financial services industry faster than you can can say "World Wide Web?"
Well, sorry, but Virginia Dean, executive director of the American Bankers Association's Communications Group, has one more thing for you to stew on, and it's a doozy: Baby boomers will be inheriting $10 trillion between now and 2010 as their parents go to that big ATM in the sky. Your job, if you choose to accept it - and you'd better - is to figure out how your bank is going to get its share of that considerable pie.Sure, a lot of that money is already resting comfortably in your bank where those boomer parents have kept it stashed since the end of World War II, but that doesn't mean that it will stay there. Boomers have discovered money markets, mutual funds, real estate investment trusts,stocks and bonds and 401Ks. . .
Come to think of it, Dean told the closing session of the Utah Bankers Association here Wednesday as it wrapped up its 89th annual convention that a lot of people, not just boomers, don't like banks or are intimidated by them - which amounts to the same thing - and are likely to take their inheritance elsewhere when the time comes.
Call it tough love or a reality check, but Dean pulled no punches as she told the UBA members what they probably didn't want to hear but what she and her association believe they need to hear.
"The fact is, the image of banks has to improve, but that won't happen if you just tell people that they've got it all wrong, that bankers are the good guys. You can't win them over that way," she said.
What bank customers tend to see when they go into a bank, said Dean, is a lot different from what bankers see on theirside of the desk. It's time to start looking at banking from the customer's point of view.
Quoting the former New York Yankees manager, Casey Stengel, Dean warned that "you need to keep the people who hate you away from the undecideds."
But bankers don't have to wait until 2010 to find out whether they've been successful in weaning the huge baby-boomer market from their mutual funds, noted Dean. Banks' market share has been on a steady downward cycle over the past five decades,from 42 percent in 1950 to 22 percent today.
ABA surveys, said Dean, have shown that bank customer demographics are not comforting. Bank customers tend to be older, less educated and "poorer" - earning less than $45,000 per year. These are not the kinds of demographics, she noted, that point to great growth opportunities for commercial banks.
"Sure, you're still making money now," she said, "but it's declining; there's severe competition out there."
And who knows what new competition is being brewed up by such giant corporations as Microsoft or AT&T, companies not currently considered financial institutions but positioned to leap into that arena.
So, what to do. To begin with, advises Dean, bankers should stop telling people what other bankers want to hear; it tends to bruise one's credibility.
Instead, she says, try adopting the kind of advertising candor recently embraced by United Airlines, which is telling its customers that it knows flying is a real hassle, full of stress and such, but the friendly skiesfolks are going to try and make it better.
ABA surveys, said Dean, indicate that customers want a few basic things from their banks. Among them:
- Make it easy and pleasant for people to do business with you. Banking has a degree of "mystery" to many people. "They think you're trying to hide something from them."
- "Don't whine. No one roots for Goliath. You think it's unfair, that you're getting a bad rap? People don't want to hear about it, especially when you're making record profits."
- Banks should cooperate in promoting their image as an industry.
- Remember that your target market isn't your old customers, but people 25 to 45 years old. "Listen to them, find out what they think of you. Set up regular breakfasts with opinion leaders."
- "Surprise people." Give them something they don't expect. Make them say "Wow!"