Wednesday, April 22, 2009

New survey hints at bank marketing
strategies and forecasts.

The 16th Bank Executive Survey was just released on April 21st and it could signal where your competition will be spending its marketing dollars in the months to come. The study conducted by Grant Thornton, a global accounting and consulting firm, in association with Bank Director magazine contacted CEOs and other senior officers of banks and savings institutions in early November 2008.

It’s interesting to note that 62% of the respondents report assets of less than $500 million, with 38% reporting assets greater than $500 million. One-third of the bankers reported that their institutions are publicly held, 55% are with private corporations and 12% have mutual charters.

Bank marketing recession plans go back to the basics.
While the study examines bankers’ outlooks for the economy, the causes of the credit crisis, credit and lending issues, future funding sources, exec compensation and strategic planning, it does offer insight for bank marketing execs. What actions do bank execs anticipate taking to grow and compete in the next 12 months? Cross-selling tops the list of strategies. Eighty percent of bankers plan to increase cross-selling efforts to current customers. Seventy-seven percent will conduct promotions to attract new customers to existing products and services. The chart outlines other marketing endeavors considered by bankers.

In a news release, John Ziegelbauer, national managing partner of Grant Thornton LLP's Financial Institutions practice said, "As evidenced by our respondents, many banks are going back to basics and refocusing on their existing service offerings."

Deposits remain important in bankers’ minds.
Increasing deposits should be on a bank marketing execs agenda since 94% of those surveyed cited that core deposits will be the most frequently anticipated means of funding bank growth in 2009. While funding is a key issue, 44% of bank execs stated that finding adequate resources is currently a challenge. And, 48% believed that core deposit balances will remain flat or decrease this year. According to the survey, some observers have suggested that banks could see an increase in deposits as consumers move away from declining returns on mutual funds. A more likely scenario, cautioned the study, is that consumers will simply have fewer discretionary funds due to debt and rising unemployment. If that occurs there would be net deposit shrinkage. Despite those possibilities, 51% say they will be increasing their share of deposits in the marketplace as a reaction to the credit crisis and subsequent consolidation in the financial services industry.

Bankers looking to GenY.
Many banks are gearing their retail efforts toward capturing GenY customers. In responding to the survey, 85% of the bankers claimed that they are moving internally and externally to meet the needs of this generation. For example, about 34% of larger banks and 21% of smaller banks will be investing in mobile banking as a way to attract this group. Only 15% said they are not meeting future generations’ needs.

Recession predictions for
consumer & commercial lending.

With lending promotions taking a significant portion of bank marketing budgets in the past, what do bankers predict for the future in the loan arena? Here are the anticipated changes:

Commercial loan demand:
27% predict increase; 28% no change; 45% decrease
Consumer loan demand:
14% predict increase; 36% no change; 50% decrease
Core deposits:
52% predict increase; 35% no change; 13% decrease
Customer refi-s:
35% predict increase; 54% no change; 11% decrease
Residental mortgage demand:
18% predict increase; 36% no change; 46% decrease

Read the entire survey on the Grant Thornton website.

Related articles in Bank Marketing:
Using refi promotions to strengthen relationships and cross-sell . . . before your competition does.

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