A Bank that Benefits by Not Offering Credit Cards

By Brent Bouchez

Leaving money on the table to build a powerful brand.

Consumer credit card debt in 2017 totaled $905 billion dollars.

Even in banking terms, that’s a lot of money. So when a regional bank makes a conscious decision not to offer credit cards, it’s a reason to take notice.

So why would a bank not offer credit cards? A businessperson might jump to internal resources, lack of infrastructure, or that the initiative lacks some strategic viability. But in the case of Beneficial Bank, a $6 billion bank in Philadelphia and South Jersey, it was none of those things.

Beneficial Bank doesn’t offer credit cards because it believes it’s the right thing to do. Or, that credit cards are the wrong thing to do.

“We made a conscious decision not to offer credit cards quite simply because our CEO Gerry Cuddy simply doesn’t believe in them,” said Joanne Ryder, EVP and chief administration officer at Beneficial. “It fits the values equation of our bank—to do the right thing financially for our region and our customers.”

While it’s mind-boggling to think of any company deciding to forego easy profit, the Beneficial Bank story is an instructive one.

The company has used its corporate values as an engine to drive all of its marketing and messaging, and real results have followed.

Its commitment to living and breathing their core values stands as a potential playbook for other regional and community banks seeking to differentiate themselves in a challenging and competitive market environment.

Staying true to its name: Beneficial Bank.

Beneficial Bank was founded in 1853 by a Catholic priest who wanted to help Irish immigrants find a safe harbor for their money. Over a decade ago, the current CEO, Gerry Cuddy, entered into the organization with a vision: He wanted to build on Beneficial’s historical values and help guide people in the local community to do the right thing financially with their money.

Many banks may declare “doing what’s right” as their vision and mission, and market that concept without much change to business as usual. But Mr. Cuddy pushed his bank to “walk the walk.”

So Beneficial took an unusual step, eliminating credit cards from its business and focusing instead on debit cards. Beneficial Bank took a clear, brave, and demonstrable stance on a pervasive form of debt that is often destructive to many consumers’ financial lives.

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Marketing values and vision, not just me too’s.

Two years ago, Beneficial decided to make a marked shift in its messaging and advertising. In an industry obsessed with “reinventing banking,” Beneficial opted to go another direction by getting back to basics and leveraging strong values instead of me-too technologies that consumers expect wherever they bank.

With an eye towards creating an advantage the larger banks couldn’t replicate, Beneficial focused on three areas that its instincts (and customer feedback) said would create a tangible point of difference:

  • Demonstrable Values – The company’s clear commitment to helping its customers do the right thing financially—through vehicles like offering debit cards instead of credit cards, offering financial literacy training, interviewing new customers through the Beneficial Conversation, etc.
  • Regionality – The company’s exclusive focus on the Philadelphia and South Jersey region, underscored by localized decision-making and a “with us, your money stays local” narrative.
  • History – The bank’s longstanding legacy, as highlighted by a new tagline: “True to Our Name. Since 1853.”

“Consumers today—not just banking consumers—are increasingly placing corporate values at the center of their consideration set,” said Ryder, Beneficial Bank’s CAO. “There was always an inclination to try to sound like the big banks, but we’ve finally realized that’s just not us. Instead, we’ve decided to tell our story, plain and simple, for all the region to see.”

The bet paid off.

The clear, no-nonsense approach had an almost instant impact in the local area. The first flight of media showed a 23 percent recall of the firm’s new tagline—a significant shift from prior taglines which had recall of just five percent.

Perception of the bank being embedded in the community “for a very long time” jumped 14 percent, and 84 percent of local consumers agreed that the bank “does the right thing financially.” Millennials, a particularly sought-after segment, showed a specific affinity for the new messaging approach.

Most importantly, the bank has thrived in today’s cutthroat environment. The bank’s share price has increased nearly 25 percent since 2016 when the campaign launched, and both commercial and retail deposits and lending have seen strong momentum, fueling the business’ growth.

What Beneficial’s story means for other regional banks.

The success of Beneficial’s campaign highlights a few notable opportunities for other regional banks as they seek to build out their own brands in the future:

Lesson 1: Values beget value.

Regional banks have an opportunity to dive deep into their organization’s values equation and create real consumer benefit (such as not offering credit cards). This can go a long way to proving worth to the local community.

A word of warning, though—banks can’t just market an empty set of values. Instead, regional and community banks need to create clear, tangible points of difference that communicate what they stand for. Otherwise, consumer suspicion will override the inherent value the bank is purporting to deliver.

Lesson 2: Regionality matters.

The key to successfully owning the local market is balance and thought.

First, regional banks must think hard about their unique knowledge of the local area. What kind of a localized media and sponsorship strategy can they use to differentiate themselves? What sort of messaging can the bank deploy that would connect specifically with a local audience? What can the bank support in the local community that truly says, “We’re committed to this area, just like you”?

Finally, regional and community banks shouldn’t be scared to throw some punches when they need to. Challenging the competition won’t just resonate with customers—it will set the bank apart.

Doubling down on regionality is a clear opportunity, but it requires a highly thoughtful and deliberate approach in order to do it right.

Lesson 3: Regional banks are smaller…but they shouldn’t feel smaller.

It’s important to recognize the inherent risk to “banking regional.” If execution itself isn’t at a high quality, smaller banks will end up implicitly communicating a hidden and dangerous message: “We’re not quite the quality level of the big nationals because we have less resources.”

The key to overcoming this misperception is simply through a focus on quality execution. Even though the message for regional banks should be local, the execution shouldn’t feel local. It should be every bit as good in quality as a national bank’s marketing.

If the first thought to this point is that banks simply don’t have the resources to execute at this level of quality and sophistication, the immediate thing to do is this: prioritize, and if certain initiatives can’t be executed at a high enough level, they should be cut.

Regional banks shouldn’t just focus on what they can do, they should focus on what they can do well.

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Brent Bouchez is a founding partner at BouchezPage, an advertising and branding firm with a unique focus: Adults creating marketing for adults. Bouchez has spent his 30-year career in advertising helping serious brands build brand images that last. His clients have included Bank of America, MasterCard, Hartford Funds, American Express, The New York Times, BMW, Nike, Porsche and, of course, Beneficial Bank. Email: brent@bouchezpage.com.

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