2009: The Year of Customer Acquisition
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Everyone agrees that 2008 was a tumultuous year—one for the history books. I'll leave it to the pundits to sort out 2008 and what happened. But I'd like to take a look at how the financial turmoil of last year will affect us here in 2009. More specifically, I want to focus on a new fact of life in financial services—customer churn—and how your bank is dealing with it.
According to Bank Info Security, over 50 banks and credit unions failed in 2008 with an additional 20 banks failing so far in 2009. Plus, there have been a number of acquisitions to take over troubled institutions. These events have forced a number of customers to change their banking relationships.
Customers are voting with their feet (or checkbooks) and choosing stable, less-risky banks. They'll move their deposits to avoid situations such as IndyMac-where even though deposits are covered, money may be inaccessible for a period of time.
Other customers are losing trust in the system. Consider how Joan Gaskins toted around a metal box filled with $19,000 for eight days before selecting a bank. Customers are looking for institutions they trust. In fact, a recent Nielsen Bank Survey showing as many as 4 in 10 people are considering changing their banking relationships.
I don't need to tell you that deposits are crucial to the financial stability of retail banks. Given the importance of deposits, banks are re-examining their deposit base and looking for creative new ways to stabilize and grow it. All while more customers are on the move.
Bank failures, mergers, and the growing number of customers considering altering their banking relationships . . . it all points to one outcome in 2009-customer churn. Churn represents a huge opportunity in 2009. But don't take my word for it. Here's George Tubin, senior research director at TowerGroup, quoted in a recent interview with BankInfoSecurity:
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"2009 is going to be all about capital conservation, so, not putting out big capital-intensive projects, cutting costs wherever the institution can. And it's going to be a lot about deposit gathering, because retail consumer, or consumer deposits are still extremely important to the retail bank, and may be more important than ever, because of having less access to credit." |
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Is your institution taking advantage of churn to add new customers? Can you grow your customer base without significantly impacting your current risk profile? Let me know what you're doing to attract and keep customers in 2009—the year of customer acquisition.