More than ever, we must take proactive steps to ensure we are empowering our customers to overcome economic crises and access pathways to prosperity.
By Lindsay Torrico
Over the last few years, banks have found themselves in a cycle of managing crisis to crisis. While the banking industry remains strong and resilient in the aftermath of the Covid pandemic and recent bank closures, maintaining a foundation of trust with our communities is not easy.
The good news is that while trust in the overall banking system might have taken a hit, more than eight in 10 Americans say they are happy with their bank and satisfied with their customer service experience, according to a 2023 Morning Consult Survey.
As we start the new year, we’re likely to experience yet another year of economic uncertainty as geopolitical tensions, inflationary concerns and stagnated growth continue. The economic outlook might be cloudy, but it’s crystal clear that we have a critical role to play in reinforcing stability and trust in banking institutions.
Now is the time to look beyond short-term crisis planning toward longer-term strategic engagement and partnership with our communities. More than ever, we must take proactive steps to ensure we are empowering our customers to overcome economic crises and access pathways to prosperity.
Enhancing and strengthening trust will take deep listening to our communities, partnerships with trusted stakeholders and tailored financial solutions that meet the unique needs of our customers and communities.
Here’s how:
Listen first. Improving trust starts with listening to our communities and fully understanding their financial needs and challenges. Start by hosting a conversation with community leaders and inviting them to share their economic aspirations for the community, financial challenges and gaps, and opportunities to work more collaboratively together. If you already host conversations with community leaders, consider taking these relationships a step further and creating a community advisory council. For example, in 2022 PNC Bank formed a national Community Advisory Council that provides ongoing guidance from representatives of community and economic development organizations on the bank’s community lending, investment and service efforts.
Grow partnerships with trusted community stakeholders. Community development financial institutions and minority depository institutions are vehicles to serve and reach unbanked populations. By partnering with CDFIs and MDIs, banks can understand the cultural practices, languages and effective products and services that meet the needs of their customers. Seeking partnerships with minority banks, as well as with HBCUs, faith-based and other institutions, allows you to utilize the trust of credible stakeholders and drive greater impact in the communities you serve. To build these partnerships between banks and minority institutions, ABA and the National Bankers Association host a series of MDI Partnership Summits designed to bring midsize and regional banks together with MDIs to better serve communities of color and low- to-moderate-income communities across the country.
Provide relevant, responsive and customized financial solutions. Strengthening trust requires us to create more tailored financial solutions for our customers. That means avoiding a one-size-fits-all approach to delivering financial education programs and services. For example, Webster Bank designed a program to promote economic prosperity of women- and minority-owned small businesses throughout Connecticut. The bank partnered with nonprofits and government agencies to provide working capital to clients who had been negatively impacted by the Covid pandemic. Since its inception, the program has awarded nearly $2 million in grants to 129 women-owned businesses in Connecticut. Designing financial solutions that meet the unique needs of communities is key to providing financial services grounded in trust. Also important is ensuring that your employees reflect the communities they serve and receive training in financial empathy, implicit bias and trauma-informed financial coaching.
As banks seek guidance and resources in building community trust, the ABA Foundation is stepping up our engagement in this arena. This is only right. Our mandate is to support banks in building impactful community engagement programs and initiatives.
As this year unfolds and new crises abound, we will continue working to ensure banks of all sizes have resources necessary to foster trust and make meaningful impacts.
Lindsay Torrico is executive director of the ABA Foundation.
