The Financial Brand Insights - Fall 2022

Know Your Niche Clients and Live Their Values Linda Hamilton COO, Iroquois Bank | Hitched

With a modern technological platform and an entire ecosystem of BaaS offerings, Thread is continually evolving to meet customers’ needs. Thread aims to be a model for small banks, demonstrating what we can accomplish when we recognize and seize wide-open moments of customer readiness in the digital banking revolution. As you evolve, beware of the technology trap — cool tech alone won’t serve your clients. Every bank has a website and an app. Differentiate your brand by building solutions that integrate with your customers’ lives in partnerships that elevate their experience.

With inflation high and digital banking exploding, J.D. Power found in April 2022 almost 27% of retail customers moved at least a portion of their money away from their primary bank. In a world full of online options, banks that don’t understand their customers will lose them to a competitor who does. Younger, digitally savvy generations — Millennials born between 1981

Innovate with Empathy to Meet Client Needs Jody Guetter EVP of Labs Innovation | Nymbus

and 1996 and Generation Z, born between 1997 and 2012 — make up more than half of the U.S. population, according to the Census Bureau data. What’s more, PwC says 57% of Millennials and 64% of Gen Zers hold accounts with nontraditional financial institutions like digital-first niche banks. To seize this opportunity, banks should move away from offering “something for everyone” and lean into specializations for niche customers. For example, in 2020 Iroquois Bank launched Hitched, a digital banking platform that caters to the unique financial needs of newlyweds and engaged couples. Hitched provides tools to help them connect their finances, create shared goals, develop healthy spending habits and make financial plans. We understand these clients’ shared values: love and commitment. We celebrate their goals and are laser-focused on helping them grow their financial wellness together. In this way, Hitched avoids getting lost in the clutter of digital brands by authentically supporting what matters to its customers. Understanding your niche is critical. A survey by 5WPR found that 83% of younger consumers expect brands they love to share a commitment to their values — cultural, environmental and more — and take actionable steps to make a difference.

Banking has an innovation problem. Innovation has been positioned to be this aspirational, out-of-reach, unattainable thing where only the big boys or cool kids get to play. Innovation isn’t just for the techies, data scientists, developers or big-budget organizations, and to evolve as an industry and truly achieve a vision of financial access, well-being and empowerment for all, we need to reshape this narrative — like, yesterday! If we’re really going to embrace innovation, I challenge us to do a better job at putting the human into digital, and the emotion into innovation. As we think about digital banking’s opportunities, we have to rethink the processes and tools we use to solve problems. That starts with an empathetic approach to understanding our clients as people first. As parents, as newlyweds, as college students, as individuals who are stressed about money and who have different goals, motivations and emotional drivers.

Solve for what customers need as humans, not what you need as a financial institution.

Swimming with Sharks: How Small Banks Can Seize the Moment

No newly engaged person wakes up and thinks, “I can’t wait to go to the bank today and open up a new bank account with my fiancé!” But they do think about how are they going to go on their dream honeymoon or buy their first home. Solve for what customers need as humans, not what you need as a financial institution. This is where the magic happens for marketing, creative, product development and the digital experience. The hard work of innovation doesn’t come from the smartest person in the room. It comes from a willingness to rethink how you identify problems and solve for solutions. In my experience, in order for innovation to really take root inside an organization, leaders must work to sustain an internal culture of trust and vulnerability and invest in building psychological safety at all levels, for all individuals. If employees can’t be open, honest, share new thoughts and ideas and challenge the status quo, how will banking evolve? How will it innovate? It can get emotional, messy and uncomfortable. But what is growth and innovation without getting a little uncomfortable? Encourage a mindset of cultural change where risk-taking is rewarded (remember we only need to be 100% compliant, not 150% compliant), and build an environment of trust where outside-the-box thinking is encouraged.

Chris Black President, CEO | Thread Bank

As we ride the wave of shifting cultural and market expectations, many banks are in danger of getting swamped by new competitors. Megacompanies like Walmart, Amazon and Apple are circling in the water, offering financial services that threaten to make small and midsized banks little more than chum. That means banks and credit unions now face the same existential threat that has long confronted our Main Street retail neighbors. The solution to extinction is evolution, which requires strategic innovation. Community banks with a solid foundation are well-positioned to evolve. For example, Civis Bank was a small community bank in Rogersville, Tenn., that has transformed into Thread Bank. While we continue to serve customers with a range of traditional banking services, we’ve also niched down to offer a digital-first business and personal banking under our new brand, Thread.

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THE FINANCIAL BRAND INSIGHTS FALL 2022

THE FINANCIAL BRAND INSIGHTS FALL 2022

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