By Mary Ellen Georgas-Tellefsen
I am still learning.
– Michelangelo at age 87
Learning never stops—not at work, not in our personal lives, and not even for a genius like Michelangelo. That’s why banks are wise to engage their customers with opportunities for ongoing financial education.
But how often do we think about the financial education of our own marketing team?
Sure, we know the value of professional development. But that usually means learning new technologies and skill sets, earning certificates, and perhaps even studying new businesses that we want to market to. Often we gloss over the basics of our own industry, assuming that everyone on the team understands what it means to be in a rising rate environment or how regulatory changes impact what we do.
It’s a mistake to assume that everyone understands the constantly changing dynamics of our business. A truly nimble marketing team will cultivate an open discussion of how the industry works—and the implications that different changes have on the job of marketing a bank.
The conundrum of innovative marketers in a regulated environment.
Consider what happened with one large, successful bank that brought in a number of top-notch, innovative marketers from other industries. The bank wanted to leverage their expertise in non-traditional marketing. This hiring strategy worked well, providing the shot of innovation and adrenaline the bank needed to improve its marketing capabilities, raise awareness, and excel at the customer experience.
The only problem was that many of these new financial services marketers did not understand the basic business model of how banks make money. Nor did they grasp the strict regulatory environment in which banks operate.
The new hires displayed a healthy skepticism for the existing compliance process, product communications, and legal disclosures. And senior marketing managers appreciated these challenges to the status quo. That said, management realized very quickly that they needed to provide some type of industry knowledge base for their educanew hires to avoid any rookie mistakes. Some were also concerned that many of the marketers didn’t really understand the connections between their budgets and actions, and the impact on the bottom line. To harness their new, non-industry employees’ creativity in a way that would benefit the bank, they would need to educate the marketers.
What bank marketers need to know about banking—the essentials.
Short yet impactful sessions in banking fundamentals brought industry newcomers and seasoned professionals up to speed. Working with an external partner, the bank set three high-level goals for their financial services education:
- An understanding of industry financial dynamics. The session provided a basic context for the financial services industry, including the impact of the economy and interest rates on bank earnings and profitability. It explained the structure and history of the banking industry, and the role that banks play in the financial services industry and the economy. Participants took away an understanding of how banks make money, issues impacting the bank earnings model, and the key financial issues that banks have to manage every day.
- Perspective on the roles and responsibilities of others within the institution. Bank marketers need to know what happens in Compliance, Risk, Legal, IT, Operations, and other areas of the bank. They must also understand how all roles have an impact on bank success and profitability.
- Knowledge of how competitive pressures, risk concerns, and strategic questions impact a bank—and the marketer’s day-to-day job. Marketers need to understand their institution’s competitive strategy and value proposition. Participants explored how their bank was positioned in their markets versus competitors. They discussed how and why financial services marketing is so different from marketing in other industries. That led to conversation on the regulatory environment and the keys to compliant marketing—as well as bank risks of every type. Participants learned about the key issues that typically impact a bank’s ability to meet its strategic goals and objectives—and they discussed how that played out in their own bank.
What happened next?
Although the learning content was created for newly onboarded employees and non-industry hires, the aha! moment came when marketers with many years of experience provided feedback. For all their years in the banking industry, most of them had never been students of their own industry. They had never had the opportunity to take a broad view of how the industry works and how their roles fit into the larger picture.
The experience also gave seasoned professionals a fresh perspective—and a forum to share their insights with junior colleagues. The group dialogue ranged from sharing specific examples of how marketing campaigns impact core deposits and net interest margin, to the impact of Reg E on fee income. Examples provided by bank employees of the bank’s programs, successes, and failures were some of the most compelling and memorable conversations of the sessions. One participant summed it up best, “Great job on the content. I’ve been in financial services for 20 years and have learned some valuable information!”
Learning options abound at every level.
There are many industry resources for providing employees with an education on the financial services industry, such as the excellent ABA Bank Marketing School.
However, sometimes banks want a quick and easy refresher course that engages employees and serves as forum for marketers to share not only their marketing wisdom, but financial services wisdom, experience, and questions in a friendly environment. The point is to define your goals for the training and then do the research to see if what you need already exists, or if you need a more specific approach.
Making better marketers.
Marketers must never lose sight of their role in the organization and how their work contributes to the success of a bank. By better understanding the industry and the economic forces they can and cannot control, marketers can create proactive and reactive approaches to:
- Retention
- Relationship deepening activities
- Loyalty
- Competitor activities
- The customer experience
We’re now in a rising interest rate environment. We haven’t marketed in such an environment in many years—and many of the younger bank marketers have never experienced it as professionals. More than ever, it is time to review the basics. At the same time, we need to remind ourselves how to think differently, yet within the parameters of a highly-regulated, highly competitive and highly successful industry.
You’re not alone if you’ve forgotten—or never learned—exactly how banks make money or why strict regulations exist in the industry. To paraphrase Michelangelo, you can keep on learning at any stage in your career. It might even be fun.
Mary Ellen Georgas-Tellefsen is an experienced banking industry consultant and has helped clients develop customized in-house learning programs, such as the one described. She is the Marketing Practice Leader at Capital Performance Group, LLC, providing strategy, marketing, and digital channel consulting services to the financial services industry.
