As a former bank president and an executive search consultant for over 20 years now, I’m seeing a seismic shift occurring in client acquisition on the commercial side of banking.
Since the dawn of time, a bank’s commercial business development efforts have primarily been tied to face-to-face contact by and between bankers and prospects. Calendars were packed with breakfast meetings, lunch meetings, golf games, charity events, Chamber of Commerce interactions, dinners, ball games, etc. Sound familiar?
Bankers who were successful commercial business developers were worth their weight in gold. They were highly sought after and hard to come by. Relationships that business developers accumulated over the years could be monetized by any bank. These individuals were rewarded as handsomely as any staff member in an institution.
In many cases, banks would team up a strong business developer with a competent credit officer in order to accommodate clients’ needs in rapid fashion. Response time became highly important, just as important as the strong relationships held by the business developer.
If this picture describes your current style of commercial business development rather than a memory, your bank is in danger of becoming a dinosaur of the banking world. Much has changed in just the last five years on both sides of the coin – both buyer and lender.
Commercial Banks Need to Catch Up to Buyer Expectations
“Traditional” commercial banking decision makers (buyers) have moved on. Their “old-school” business development counterparts at banks are retiring in droves. The buyer of commercial banking services today goes about things in an entirely different way. Millennials (or “Gen Y,” currently between 25 and 40 years old) are moving into key managerial and C-suite roles. They are not necessarily interested in developing a deep, personal relationship with their banker. Instead of the breakfast, lunch, dinner, golf continuum, these clients and prospects base decision making on internet research, online references and a bank’s website for ease-of-use and meaningful information.
No longer tethered to physical locations, buyers of commercial banking services value the same level of convenience and rapid response as they receive in their personal banking. They expect lending processes to be transparent and facilitated digitally, documentation to be stored and secure in the cloud, and communications to rely on text and email.
The Sector’s COVID-19 Response Points the Way
The banking industry’s uncharacteristically rapid response to COVID-19, implementing in a matter of weeks the digital loan and grant disbursement programs that have touched nearly every SME, commercial and corporate client, has “exposed” what is possible and is now expected.
While business customers of all sizes are demanding the enhanced services facilitated by digitalized operations, many banks have been slow to translate the power of digital into their existing technology, capabilities or culture. Time is running short, though, as “fintech” companies and other competitors have increased mind share and are positioned to step into the commercial lending space should traditional banks fail to meet expectations.
Banks will want to incorporate such concepts as digital lead generation and sales enablement - not just for consumer clients and prospects but for commercial business as well. This means that banks will want to upgrade their technological look and feel and rely upon subject matter expertise and content-rich mediums, including webinars, blogging, whitepapers, etc. All of these mediums will funnel into digital lead generation when a prospective client performs its own outreach to find a new banking partner.
New Paradigm Requires New Skills
Matching the buyer’s digital fluency and service requirements, the characteristic personnel needed to serve clients may be changing, too. The suave, business-savvy client development bank professional of the past is out of place in this new process-accelerated digital environment. Credit competent, responsive, client-centric, service-oriented individuals fit this new model. Further, banks will want to invest in digital marketing know-how, including content writers and SEO experts to attract potential customers into the bank’s funnel.
Does this food for thought translate to your institution’s talent management plans for the future? Keep in mind, the oldest Millennial is now 40 years of age and may prefer video games to golf. It’s not to suggest that the days of “wining and dining” a prospect are completely a thing of the past, it just may occur at a Starbuck’s and clearly is not the only way to attract business.
Digitization enables banks to gain valuable, timely insights into operations, customers and markets; you will need to put the “right people” in place to effectively execute the plan. If this article does not cause you to think twice about how you staff and go to market, you might do well to remember what happened to the dinosaurs.
Have questions about talent acquisition or compensation? Don’t hesitate to connect with the author, Jay Meschke, at (816) 945-5500 or firstname.lastname@example.org.