As you close the books on 2018, it’s time to hit the restart button and look forward to the year ahead. Hopefully, part of that vision includes ways to more fully engage your account holders and help them embrace increased financial security.
After a holiday season of strong spending, many consumers are shifting their focus to paying off debt and getting their budgets back in line. For some, this can be tough. According to a recent Bankrate survey, nearly half of all Americans have felt pressured to spend more on holiday gifts than they can comfortably afford. As a result, at this time of year far too many families and individuals find themselves in a position to make another kind of transaction — with a payday lender or the local check-cashing store — to make ends meet.
Granted, this provides a quick, temporary solution when funds become short. But this type of transactional event — which is all a payday lender or check cashing business provides — can be an awkward, costly experience that does nothing to help consumers build long-term financial stability as they look to the new year.
As you kick off your strategy for 2019, here are five things you can do to ensure you are providing reliable advice and the resources your account holders need to maintain their financial well-being.
- Focus on building relationships
By utilizing the services and financial guidance that are part and parcel to an affiliation with a community bank or credit union, consumers can connect to professional financial advice, along with more affordable, less risky services that will set them on a more stable financial path. Something they definitely won’t get from a quick cash, transaction-based alternative.
All it takes is a little bit of awareness and a commitment to developing long-term account holder relationships.
- Make a good first impression
Engaging with consumers when they make initial contact with your institution is a first step toward establishing a long-term connection. It’s important to learn if they are planning for some major life event that will require financial assistance, or if they are looking for advice or services that will provide more peace of mind when it comes to managing their finances better.
Once you know their needs, be prepared to make a case right away for how you provide a variety of solutions that can help them reach their financial goals. If they leave without realizing what you have to offer, they will likely end up doing business somewhere else.
- Know your stuff
Make sure your employees can accurately explain how all of your products and services address account holder needs, using terms they understand. Showing empathy to someone’s financial situation can go a long way in determining the quality of an account holder’s experience, and establish your institution as a trusted resource and financial partner.
- Maintain fair and transparent fees
Recent holiday spending estimates are proof that consumers are willing to pay for things that are important to them. But when they find themselves up against a wall due to an occasional shortfall or account oversight, the high fees and short payment terms of a pay day loan or quick-cash solution can result in a cycle of debt that may cost them more than the amount they needed initially to make ends meet.
On the other hand, a fully disclosed, reasonably priced overdraft program provides account holders with a long-term solution that they can access — with full knowledge of their costs and responsibilities — when they have a short-term financial need.
- Offer more than transactional service
Effective account monitoring allows you to see when someone is experiencing financial difficulties. That’s when you can counsel account holders about the service alternatives that are available to help them manage their account more effectively and perhaps set aside funds in a savings account for future emergencies. Plus, keeping them informed about their account activity through automatically distributed communications shows you are committed to their long-term financial health.
Sometimes when people find themselves in financial situations that demand quick action, the solution they choose can unfortunately lead to more financial hardship, if they aren’t aware of less costly and less risky options. Don’t miss out on opportunities to set your institution apart from the transaction-only solutions that are available today. Not only can you help your account holders start the new year with a reliable, reasonably priced resource and more financial peace of mind, you can establish and maintain stronger account holder loyalty.
[x_alert heading=”About John M. Floyd & Associates (JMFA)” type=”info”]JMFA has been helping community banks and credit unions improve their performance and profitability for more than 38 years. Whether you’re looking for ways to recover lost revenue, uncover expense reduction opportunities or improve service delivery, JMFA has the right solutions to help you not only meet, but exceed, your goals. We are proud to be a preferred provider to many industry groups, including CUNA Strategic Services. To learn more, please contact your local representative or call 800- 809-2307. [/x_alert]