FinTech Marketing

Recently, Scott Mills sat down with Trey Reeme, director of channel integration of TDECU. They discussed the credit union’s social media strategy, his role at the company and why people should be looking at 4Square.

 
 
More about Trey, the credit union and his efforts –

Trey leads social media campaigns and corporate blogging efforts and launched Young & Free Texas (youngfreetexas.com) in August 2008.  Prior to joining TDECU ($1.5 billion), he was a successful entrepreneur and the main contributor to the acclaimed credit union industry blog Open Source CU.

A highly rated speaker at national events for CUES, CUNA, the Filene Research Institute and the NCUA, Trey lives in Austin, Texas, with his wife and daughters.  He is a graduate of Centenary College of Louisiana. Trey can be found at twitter.com/creeme.

Share on Facebook

A few months ago, we decided to conduct a study on bankers’ opinions on what sources of information were most credible.  We also looked at communications tactics, e.g., white papers, ads and social media.  A few of the results left us rethinking how to best reach bankers.

Here are a few findings for your consideration:

General media scored the lowest of the sources we surveyed. In addition to the numerical score, bankers expressed skepticism. One wrote, “General media has an agenda…much of what is presented about the U.S. banking industry is not in good context.”  Our observation is that bankers don’t read general media to help them solve problems or assist in better decision-making.

Industry peers scored the highest among bankers for credibility. If you market to bankers, include a banker in your communications to increase the trustworthiness of your materials. If you can’t find a banker, get an analyst.

As a tactic, blogs had the least credibility with bankers. On the surface, you might be tempted to shelve the corporate blog you started last year; however, as part of a larger communications program, they can play a valuable role, namely: 1) in building a repository of intelligent content on your key issues and 2) assist in SEO or helping people find you on the Internet.

And lastly, there was no perfect “10” for sources or communications tactics in our study.  Nor was there even a “9” or an “8.”  In other words, there is no single best way to communicate to bankers. Combinations of tools and sources are the only way to make your case.

A webinar with the entire findings and observations is available at http://bit.ly/wmasurveyondemand

Share on Facebook

For those who may be unfamiliar with the Association for Financial Technology (AFT), it is a volunteer association of industry visionaries, thought leaders, strategic senior managers and delivery professionals from companies serving the financial services vertical market.

AFT recently hosted its annual Spring Meeting and I had the opportunity to participate in a special panel on social media along with four bankers and credit union executives. I thought that I would share some thoughts from the meeting. Other panelists included: Trey Reeme, Director of Channel Integration of Texas Dow Employees Credit Union; Jesse Torres, President and CEO of Pan American Bank; Susan Guess, SVP/Marketing Director of The Paducah Bank & Trust; and Joe Bartolotta, EVP/Marketing Director of Eastern Bank.

In general, the panelists and their organizations recognize the potential of social media and accept that it will likely remain a growing, necessary component of the marketing mix moving forward, but each institution had a unique approach to its evaluation and implementation.

The point was made that a majority of financial institutions’ leadership in this country are over 40 years old (more likely, over 50) and considering the highly regulated nature of the financial services industry, many bank management executives and board members are uncomfortable with the use of social media on behalf of their banks.

But, all agreed that social media is here to stay and there are statistics to bear that out:

• Facebook currently has more than 350 million active users globally, with more than 700,000 businesses with active pages.
• Mobile continues to grow, with more than 65 million Facebook users accessing their pages through mobile devices.
• Twitter now has 75 million user accounts (however, only 15 million are considered active).
• LinkedIn has reached more than 50 million users worldwide.
• For the first time in history, U.S. advertisers will spend more on digital marketing than on print advertising, and…
• A recent Duke University CMO survey indicated that social media is expected to account for 10 percent of all marketing budgets this year.

Each of the panelists had slightly different methodologies in how they utilized and evaluated the success of their social media campaigns. One bank viewed social media as “word of mouth on steroids” and is committing almost all of their marketing dollars to the channel while another was much more cautious from a regulatory risk standpoint and had taken a much more tentative approach at engaging in social media. What was apparent was, while there is still a great deal of variation in how financial institutions view social media, the great majority of institutions at least have it on the radar and accept that they will need to have some level of involvement in order to remain relevant to a particular consumer demographic.

Share on Facebook

Richard Crone is a 30-year banking veteran, founder and CEO of Crone Consulting, and one of the industry’s leading experts in mobile technologies.  He is also one of the key contributors to William Mills Agency’s seventh annual “Bankers as Buyers” report.  Scott Mills, agency president and editor of the 2010 report, recently sat down with Crone to discuss what’s in store for 2010.

Mills: You’ve established yourself as an expert in mobile, especially as it applies to payments and banking.  When did you decide that mobile was the future of banking and why?

Crone: Three years ago, the same issues were being raised by bankers that we heard in 1995 when the Internet was coming of age. I’ve seen the movie before, but with mobile the issues are even more complicated because it is not just one channel, but 16 combined into one device.  The big difference is that mobile is a cross-channel enabler for customer self-service since it is present within every other channel experience.

Mills: In an ideal world, how would the average consumer use mobile in their everyday life?

Crone: For self-service, payments and opt-in “self-marketing”

Mills: In “Bankers as Buyers,” you mention that mobile banking is growing far faster than online banking.  Why do you believe that is?

Crone: Mobile banking “crossed the chasm” in half the time of Internet banking and is projected to grow twice as fast because the device is already in use with no infrastructure lag experienced by PCs

Mills: When do you believe we will see widespread adoption of mobile payments by banks, merchants and consumers?

Crone: Demand unquestioned is not unquestioned:  30-50 percent of consumers are using or considering using mobile banking and early movers are growing 3 to 5 times faster than Internet banking (e.g. Bank of America at 3.8 million, adding 150,000 new users per month)

Mills: Is there a silver lining for the banking industry in this recession?

Crone: Bankers can use mobile to increase their operating margins by reducing costs.  Secondly they can use mobile to create new revenue generating lines of business.  For example, SoundBite Communications Inc. has developed a new service called Proactive Payments™ that is turning Expedited Payments upside down.  This is an opt-in service where the customer receives a call or text message if their remittance has not been received prior to or on the due date.  Customers can respond immediately and initiate an Expedited Payment for a convenience fee on the spot.  What overdraft protection is for checking accounts, Proactive Payments™ is for bill payment; think of it as customer initiated “underdraft protection.”  The service further extends the benefits of Expedited Payment by supplementing an outbound or “push” channel to the existing inbound or “pull” remittance connections points for consumers; and in doing so creates a new revenue generating opportunity for the bank and its serviced billers.

About Richard K. Crone
Richard K. Crone leads Crone Consulting LLC, helping financial institutions, billers, merchants, payment networks, processors, start-ups and investors transform payments from a cost of business to revenue-producing new lines of business.

In his 30-year career in financial services, he has focused on harnessing the technological innovations that have shaped the industry, from the introductions of ATMs, home banking, Internet commerce, and Electronic Bill Presentment and Payment, to today’s Mobile banking and payment developments.

Mr. Crone has helped define the mobile commerce strategy for leading financial institutions, wireless carriers, payment processors, large recurring billers, card issuers, device manufacturers and technology start-ups.  Crone Consulting, LLC has performed due diligence on many of the largest M&A deals and tier-one venture-backed investments in online “alternative payments” and the mobile commerce arena.

Share on Facebook

Bill Bradway, 35-year banking industry veteran and founder of Bradway Research, is one of the key contributors to William Mills Agency’s seventh annual “Bankers as Buyers” report.  Scott Mills, agency president and editor of the 2010 report, recently sat down with Bradway to expand on his predictions for 2010.

MILLS: You’ve spent three decades in the financial industry.  How was the recent recession different from those in year past, in terms of their impact on the industry?

BRADWAY: The great recession of Dec. 2007–and still running, has had a much more severe impact on consumers than 1973–75, 1980–82, 1990–92 and 2001–02. While high unemployment marked some of the previous recessions, this time the accumulated consumer debt load by 2007 far exceeded the prior recessions and was exacerbated by very risky lending practices that assumed the good times would continue supporting home prices and income levels. Too many home mortgages were originated without any or enough homeowner equity and adjustable rate mortgages were poorly designed (e.g., pay option mortgages, teaser rates on 2/28 subprime mortgages).  Finally, the evolving financial innovations that surrounded securitizations and complex derivative instruments turned into illiquid instruments of “financial destruction” (to borrow a phrase from Warren Buffet). The financial industry meltdown exposed how the inflated real estate asset bubble was really a house of cards.

MILLS: How will 2010 be different from the past two years?

BRADWAY: I expect 2010 will be marked by a slow, and sometimes choppy, recovery. By the end of 2010 the banking industry’s earnings should markedly higher vs. 2009; loan reserves and net charge offs will be shrinking; and resolving failed institutions benefits the industry. Some regional markets will bounce back and show encouraging signs of the economic recovery. Regions with strong high tech and health care industry segments are good candidates as job growth will be up. Community banks and credit unions which are in good shape in these markets stand to gain market share.

MILLS: What are some of the most important strategic banking initiatives that happened during the recession?

BRADWAY: The attention focused on the various elements of risk management has been intensified. A second broad initiative has addressed cost reduction, albeit in a variety of ways. The most successful cost reduction efforts have streamlined operations, improved business processes and reduced the “time” component. Ultimately, staff becomes more productive and customers receive better service and sometimes better pricing.

MILLS: You are predicting that there will be more bank closures in 2010 than there were in 2009.  Why is that?

BRADWAY: Over 25% of banks lost money in 2009, which compares to less than 7% in 2006. I have forecast more FDIC failures in 2010 vs. 2009 as the FDIC has replenished its reserves with the three year advance on insurance premiums and has added more staff to handle resolutions. Fewer troubled big banks need resolution meaning 2010 failures will have an even higher concentration of small banks which will lead to a higher number of failures.

MILLS: What do you anticipate the “mission critical” areas of IT spending to be in 2010?

BRADWAY: “Mission critical” varies by institution in any given year. Overall, the state of an institution’s IT infrastructure and capacity to modify and/or integrate new application capabilities is one long term “mission critical” requirement that is sometimes overlooked or ignored. Another “mission critical” area is the ability to view business results and client relationships from a comprehensive customer-centric perspective. I believe a share of wallet philosophy will be the best long term strategy if it is well executed. Among the big banks, Wells Fargo (starting with the former Norwest) has done an admirable job over the past 18 years on both the consumer and corporate sides of their franchise. USAA is another institution that has excelled in serving consumers across their financial wallet. Some small institutions also get this strategy and have moved faster and more effectively than big institutions.

MILLS: In what areas should banks be focusing their IT spending in 2010 (vs. where they will be focusing their spending)?

BRADWAY: The answer to this question is related to “mission critical” requirements for each institution. A “follow the herd” mentality at an institution that has not addressed its “mission critical” requirements will most likely lead to disappointment. Every institution should have a clear focus on its “mission critical” IT requirements and that includes a top management and line of business executive buy in. Once that buy in is endorsed, the decisions on which IT investments “should” be addressed is much easier for an institution to make. In general, I believe all institutions should be making IT investments that improve its ability to operate around customers and their needs – which touches on products, distribution channels, and analytics to highlight three key areas.

MILLS: As an entrepreneur, how has the economy impacted your business and what measures have you taken to ensure success?

BRADWAY: To start with, I have a boutique expert business model. The market turmoil tightened budgets everywhere and sharpened the focus of both institutions and FinTech vendors. My focus on delivering very timely, insightful analysis on hot topics that do not have clear answers, such as which BankTech startups and innovative solutions have the potential for high impact has been well received. My ability to be nimble and strategic has allowed me to address customer needs on a timely basis. Finally, during the past three years, more customers have welcomed my “on demand, less is more, by-the-drink expertise.”

About Bill Bradway
Most recently, Bill Bradway was Group Vice President, Banking and Insurance at Financial Insights, an IDC Company from November 2002 to March 2006. which covered all corporate- and consumer-oriented financial products and their underlying technology solutions, specializing in core bank processing applications, multi-channel solutions, payments solutions, data warehouse and business intelligence solutions, and customer management solutions. Prior to Financial Insights, he was president and co-founder of Meridien Research before its merger with IDC in November 2002. Before co-founding Meridien Research in March 1997, he was a founding member of TowerGroup, which started in April 1993.

Prior to his career as a senior industry analyst covering financial institutions and their use of technology solutions, Bill Bradway was an executive vice president at Coast Federal Bank, a $12 billion consumer bank based in Los Angeles, California. He was responsible for a variety of banking businesses, including mortgage servicing, asset-based lending, insurance, as well as information technology, marketing, and in-house legal counsel. Other responsibilities during his 15 year career at Coast Federal included mergers & acquisitions, managing a region of 10 retail branches, strategic planning and asset-liability management, branch acquisition, and community reinvestment act compliance.

Share on Facebook