What makes a financial institution healthy? I would argue it has nothing to do with who the lead dealer was in the last great IPO or who lent money on the last private equity deal but which financial institution has the ability to attract our money into boring old chequing and savings accounts. After all, where is a financial institution going to get the money to do the big deal? Why, from you and me!
Getting our money into a chequing or savings account has become big business: free iPod’s, annual interest awards and no-fee accounts are only some of the tactics financial institutions are employing to attract your money.
But what works and what doesn’t? And, how does a financial institution decide on what type of promotion to launch? I invited CitizenBank of Canada’s resident Bank Evangelist, Nancy Zimmerman, for a virtual conversation to explore the thought-process of a financial institution as it tries to woo our money into their safe (Nancy’s comments in italics; mine are in bold)
Nancy, thanks for joining me and agreeing to share your insight. For those not familiar with CitizensBank of Canada, please give us a quick and dirty of what it does?
Citizens Bank is an online bank owned by Vancity credit union. It’s a bit of a best-kept-secret in Canada! We offer all the usual banking products: Chequing (free), Savings (high interest), lines of credit, visas (including Amnesty Int’l and Oxfam affinity cards), mortgages and foreign exchange services (including wires to India or Philippines, 24-hr delivery). We’re governed by the federal Bank Act, and members’ deposits are protected by the Canada Deposit Insurance Corporation.
CitizensBank is part of the VanCity empire which has a pretty substantial market-presence in British Columbia (and trying to put a foot-print in Ontario) but still has to compete with large financial institutions. There are obviously the major banks but HSBC also has substantial operations in the lower Mainland. Exactly how competitive is the market-place right now?
A: It’s incredibly competitive. Customers have so many choices. They probably already have relationships with 3+ financial institutions who are trying to sell them more. There are the old established banks all the way through to new players from retail (eg Canadian Tire). And whatever you buy, there always appear to be financing terms available – from cars to sofas. More competition. The internet is often a first stop for research. Comparison tables of rates and product features are popular and they put all of these financial institutions on an equal footing.
How does someone stand out when we are being marketed so aggressively by so many financial institutions?
AT: You cannot get away from price - great value is the entrance card to winning over a new customer. Next, particularly in the online environment, the benefit to the customer has to be clear, fast. As a Bank with a clear ethical policy, we hope we also appeal particularly to Canadians who will be interested in not just what we provide, but also how we do business. For example, we are carbon neutral. We offer term deposits used for micro-credit lending in developing countries. We give back a percentage of our profits to organizations nominated and voted upon by our customers. Being a good corporate citizen (we’re not called “Citizens Bank” for nothing!) is part of our dna, and we hope that matters to our customers as well as the great value.
Take us behind the creation of a promotion. Who thinks it up: head-office, the head of retail or the branches?
AT: These ideas, be it a new product or a spin on an existing product could come from anywhere – inside or outside the Bank. We encourage front line customer service reps to feed ideas through, we execute regular customer surveys, but then we do have members of the marketing team with specific roles to evolve the ideas. They will consider many parts - from the macro environment and global marketing trends to existing customer behaviour, competitive positioning and successes taken from other industries or financial institutions from around the world.
For CitizensBank, what is more important- getting new clients or having existing clients deposit more
money over?
AT: We’d like both! But given the question, deepening the relationship with existing members is the choice. A customer investing more gives us a thumbs up on the products and value we are offering and the potential for a longer term more profitable relationship for the customer and the Bank!
Take us through a CitizensBank promotion (yes, here’s your chance for a shameless plug), how do you roll it out, for how long and how do you consider it a success or a failure?
AT: Our latest promotion is on our Global Chequing Account, launching Sept 16th. We’ve done away with the monthly account fee and pretty much everything is unlimited. However, the most exciting feature is that we’ve removed the fees for using ATMs when outside of Canada. These can be as much as $5 each time at other banks (there may still be a local bank machine charge). We believe this has great potential for those that like to travel – from the cross border shopper to the round the world traveller. No one likes fees.
So we roll this out in stages. First up we get our own staff prepped and understanding the benefits. This year, we’re trying a first: letting the blogosphere know about it before anyone else! Then we are letting existing account holders and our customers know and then it will be on to the Canadian public at large. We have a number in mind of new accounts we’d like to sign up by the end of the year and how much the accounts are being used. That’s our success measure.
What is the role of client feed-back in creating a promotion?
AT: As said before, we do have a continuous customer feedback channel as well as annual surveys.
Recently, we’ve started something new – a little bit open-source, if you will J
We created a Citizens Buzz online member advisory panel at the beginning of this year. Customers have the opportunity to provide information that will directly influence our product and service enhancements and marketing initiatives.
[Nancy pipes us: that’s also part of my role, as Bank Evangelist – to keep tuned to what Canadians want from their Bank and relay that back to the Executive – and you can bet I do, lol!]
Last question: here’s a question everyone always asks- can the branch manager give me an even better deal than listed and, if so, how much discretion does the branch managers have to give me an offer I can’t refuse?
AT: At Citizens Bank we are extremely transparent in our pricing. This is particularly crucial given we operate primarily in the online space. The price you see on our website is the price you get. This is in contrast to some of the drawn out negotiations you may have at a traditional bank. We want to be clear and simple!
Thanks for your time and insight!
Thank You for sharing your space with us today. If any readers are on twitter or identi.ca please connect with me @citizensbanker J
Just as a final note, some in the blogsphere have already reported on CitizensBank 3.4% interest ultimate savings account. If you live in Toronto, CitizensBank is also opening a branch at 700-184 Front Street East (Telephone 416.868.8310). Please visit the branch of call for more information.