Michael and Allison share insights into the future of banking from MEGA Conference 2018.
Michael Reynolds Hey everyone. Thanks for joining us today. Good morning, Allison.
Allison Gibbs Good morning.
MR You sound so chipper.
AG Good morning!
MR You finished your coffee drink, so I thought you'd be a little more --
AG I did. Well, I was in the middle of typing something out because you know -- okay. I don't know if anybody else has this -- maybe you do -- where you have two minutes left before your next thing starts, either a meeting or podcast, so the intro started so I was like oh, the intro started; I can finish this one thing. And then I never finish it. Or I get in the zone and I miss the start of the meeting. So anyway, that's what was just happening to me.
MR Wah wah.
AG But now I'm here and I'm present.
MR [laughs] In song form.
AG In song form. Michael hates it when I sing, and so --
MR Not always. Just most of the time.
AG Just here for you. I just want my life to be a musical, and I want it to be --
MR You can sing Moana all you want --
AG -- song and dance.
MR -- because that’s still my family's favorite because Eli's all about Moana.
AG As he should be.
MR As he should be. Did you like how at his party --
AG Girl power.
MR -- Moana's a super hero too.
AG Yes, okay. So now I have to tell the story. There was a little gift --
MR Allison's kids came to my three year old's birthday party.
AG -- he had a little giveaway at the end, and it was either Avengers or Moana that the kids could choose from. It was these little crayon kits --
MR Coloring books --
AG -- yeah, it was great. And Michael just holds them up and goes "Do you want superheroes or do you want Moana, who is also a superhero." He was very clear to be gender neutral and nonspecific.
MR He's totally a superhero. I keep telling you a superhero is someone who's brave and helps other people. So anyone can be a superhero.
AG I mean, you know how I feel about Moana. I want to be her when I grow up.
MR Our show today is not about Moana.
AG It's not.
MR Despite what you might think.
AG It could be, but it's not.
MR So Allison and I are recovering from MEGA Conference this week. By recovering we mean decompressing all the great information as well as the networking and just hanging out with a bunch of smart banking professionals. It is the Indiana Bankers Association MEGA Conference annual event. It was in downtown Indianapolis and we had a great time, and we wanted to share some takeaways on the future of banking that we gleaned and agreed with from MEGA Conference. We didn’t agree with everything we heard. But we heard a lot of things that we very much agreed with and would love to share with maybe those who weren't in attendance or maybe didn't pick up on some of these things. This obviously applies to everyone who is outside of our geographic area who we serve. Do you want to start or do you want me to? I've got a list of things I'd like to -- you're pointing at me.
AG I'm pointing at you because you have the list, and you didn't send me the list after we talked about it.
MR Oh, I thought you had your own list.
AG No, I thought we were talking about the same list.
MR Oh, no you have your own list. [laughs]
AG I do have my own list.
MR All right, so I'm going to start with speaker series. This really jumped about out at me. The first thing on my list that is, I think, something -- none of this is really revolutionary or earth shattering, but there are things that most banks and credit unions are not doing. One of those things that I have been harping on for a long time now is a speaker series. One of the speakers at the conference, in the middle of his presentation, gave some tips on things you can do to differentiate your bank and serve the customer better. It's something that we've been saying for a while as well and that's make a speaker series; make an educational series at your branches where you bring in your own customers or outside experts that are professionals in different areas. Maybe a weekly or a monthly speaker series to give presentations on different topics like taxes, like debt consolidation or debt repayment, home buying, all sorts of life event -- even wedding planning -- all sorts of life event stuff that affects money.
This would be -- no one's doing this. I'm sure someone out there is, but I haven't heard of it yet. People aren't doing this in their banks. They aren't creating a really solid speaker series. They might have a lunch and learn occasionally or a networking event here and there, but they're not committing to a speaker series. I would love to see -- and I think this will happen soon for those who really jump onto it and really decide to be innovative -- but line up a full year's schedule of a speaker series, invite your community, make it a fun event, make it food, make it a celebratory, fun, networking event and bring in great speakers that teach on topics that your customers and members care about. I love, love, loved that tip and kind of prediction that banks are going to be doing this more and more. Thoughts? Agree, disagree? Thumbs up, thumbs down?
AG I 100% agree with with. And this will come into play quite a bit with the elusive millennial.
MR The millennials --
AG The millennials.
MR -- that everybody is courting.
AG There is a number that I heard -- a piece of data at IBA this week that 69% of millennials say that they are not equipped to deal with adult finances, which I think is a staggering number and really alarming.
MR They need help. This is a call to action. They need help.
AG Well, if you think about it, nobody teaches this stuff in school. You might have an economics class, but they're not diving into --
MR It's all theory.
AG -- it's all theory, and they're not diving into personal components and how do you set yourself up for life. That is all on the onus of parents, and I don't --
MR I mean, parents don't get it either and they can't teach their kids.
AG Well, I also don't think that parents -- I mean, you have children, so you know what it's like. You don't always want them to have to deal with the dumb stuff of life, you know?
MR Yeah. Yeah.
AG You protect them from that. It's causing me to totally rethink how I talk about money with my kids because if I can start it very young. But what a great -- that could be a whole speaker series in and of itself.
MR Kids and money. Yeah, I love seeing Eli's piggy bank just grow and grow.
AG Oh, me too.
MR He's got like 40 bucks in there right now.
AG Me too. But, Harper, my oldest -- my two year old obviously has no clue. But even my oldest who understands the concept -- she understands what money is, she understands why we have it, she understands how we get it, she knows -- she's learning in school a dollar and quarters and adding all of that stuff up. But she doesn't understand how valuable it is to sit there and have it be sitting in her piggy bank. Because it's kind of out of sight, out of mind for her. So she doesn't even think about it I don't think. And so I think this whole concept of a speaker series -- the concept of an educational programming is going to be huge for millennials because millennials are seeking out expert advice. We're not these crazy people that just sit there and eat Tide pods, I promise you that.
MR [laughs] And play on Snapchat all day.
AG I promise you that we are all very smart. We just had a totally different upbringing and a totally different economic situation leaving college than any other generation before us. So if you embrace that and create the educational programming, that could win them over for life.
MR And here's the thing. You have to commit and do it really well. I've seen situations where oh, we're just going to bring in a boring speaker about taxes and we're going to have some lunch and it's like uhh. But you really have to own it. To really do this right, you have to do it as if it were a product you are promoting with a campaign behind it.
AG Yes, exactly.
MR You've got to get dynamic speakers. You've got to market it multi-channel. You've got to make it fun. You've got to really invest in this series, and it will pay off. So wanted to add that.
AG 100%. You have to meet them where they're at. And this is going to be a major cultural shift from a marketing perspective for banks and credit unions. But well worth it in the long run because -- obviously we know that auto loans, mortgages, that's all, generally speaking, very much a desired product to sell for banks and credit unions, and millennials are putting off mortgages and putting off buying new cars and putting off all of those things because of crippling student loan debt and things like that. And so if you can help them get that stuff into order first, who do you think they're going to think about when it's time to buy their first house?
MR Well that's actually an immediate segue on something else on my list which is you want to sell loans, but your customers and members want to be debt free. And that's one thing that he mentioned -- the same speaker, I believe, actually mentioned this, and that segues into that because what are you -- so next, what products are you marketing and pushing on people and trying to encourage people to buy into when really it may not be what they want. So like you said, the speaker series could help people get to that point where they are ready to buy a house sooner because you helped them with that. So instead of promoting products so much and promoting debt products especially, when a lot of these millennials are done with debt, they're tired of debt, right? Is that pretty fair to say? I mean, you and I are very anti-debt, I know, but --
AG I am extremely fatigued with debt.
MR Yeah, a lot of millennials they are -- and one of the speakers you went to actually aligned with the philosophy that I really like, which is pay off debt before you worry too much about the big stuff like buying a home or investing a lot. Get a lot of the deb out of the way and clear it first. And so if you align yourself with how many millennials are thinking and shifting their thinking, you can go with the flow of their lifestyle and get access to their attention much better than if you were just trying to push loans on them. Is that kind of what you were taking away?
AG Yeah, so Lindsey was the one -- she's the speaker that was talking about millennials and banking where I heard a lot of these ideas. And it's basically that -- the bulk of why a lot of people are so angry in our generation about debt has to do with student loans specifically.
MR That's a big pain point.
AG It's a huge pain point. And she said that once you go past 25 thousand in student loan debt, that that eliminates -- that's the tipping point of removing the joy of having a college degree. Which I thought was fascinating because --
MR Seems legit.
AG -- if I think about -- I was fortunate. I left school with no student loan debt, but my husband has some and that's basically the tipping point. And if you hear him talk about his degree, he's like uh, whatever, it was great that I went to school, but -- it's so fascinating to think about that. What's the anxiety of just thinking about the debt, regardless of if we have the money to pay for it or not in the 10-year time period that you have to pay for it, it's just the mental anxiety about the debt. If you can help eliminate the mental anxiety about it and become that trusted advisor, I think that's a lifelong customer right there.
MR Well just helping people choose the right college for their kids could be a very simple shift in thinking. Because millennials have been told all their lives oh, go to a great school and you'll get a great job; don't worry about the cost because you're investing in yourself. And they end up with all this student loan debt, which --
AG Which is false.
MR -- yeah, false.
AG I will get on that soapbox any day of the week.
MR Anyway, that's a whole --
AG That's a whole other conversation, and you can hear my blood boiling just talking about it. I'm very proud of my degree. I'm proud of what I've done, but man, woo.
MR Well, you went to a state school and were responsible and --
AG I did. And I also packed as much in there --
MR -- cost-wise a good decision.
MR Anyway, we're getting -- we could really talk about this for hours. But we won't. You're welcome. Next on my list is the community and regional banks are very well positioned to be what people want, which is in the middle of the spectrum between fully hands-on old school and completely automated robo-service. What I mean by this is there are certain situations where -- let me back up.
There is one mindset which is people want all hands-on, face-to-face customer service, and technology doesn't matter. The other end of the spectrum is hey, it's all automated. A lot of the huge financial institutions it's just this auto attendant and online services and you can't ever talk to a real person, and you can reach a point of frustration very quickly. And so community and regional banks and credit unions are right there positioned in the middle of that huge space where, again, let's say millennials, going back to that space, or even younger or older people in that space that they want high-tech services. They want to be online, they want self-service, but there comes a point when they are ready to talk to a real person and have their hand held along the way. Combining those two services in a great, excellent, well-thought-out way is the way to reach that group of people who, I think, are in the majority honestly.
I mean, the majority of people want a combination of great technology and great service. The larger organizations that are just all automation and tech can't deliver it. And the ones that under-invest in tech can't deliver it. And in the middle, you can reach people and give them what they want. Is that a good way of putting it?
AG Yeah, I think it's all about balance. The one thing that's jumping out at me. Do you remember the lunch -- his name was Lee Wetherington. He was talking about -- he was basically talking about technology components that banks should be concerned about in the next five years.
AG And one of the things that he said was bots -- you're going to hear everybody say "You need a bot. Oh, you need this. You need a chat bot." And he said, "No you don't because they're not ready for prime time." Well, I think that this combines a lot of this in that you have to be very thoughtful about how you put the automation into place. And that -- what'd you call it? Robo-? What term did you use?
MR Robo. Yeah, just automated services.
AG Yeah, so you have to be very diligent about selecting the right automated service because there are a ton out there. I disagree with him in that -- because he said that chat bots are not ready for prime time --
MR Yeah, I disagreed as well.
AG And I disagree with that because I think that there are some out there that are. And the example he kept saying was we've all been in the airport and we've heard the guy on the phone saying "Representative. Representative." You know, yelling at the automated service. He's right. There are some that are not ready, but there are a few, I think, that are ready for it. You just have to be very strategic and very thoughtful about how you set them up and it is going to be a financial investment. Lots -- I shouldn't say lots of money, but it's going to be another software cost for you long term. And Michael is taking a photo right now and it's really throwing me off. [laughs]
MR Keep talking. Do you want to stop while I take my photo? [laughs]
AG Well, I was looking at the next thing you have on the list.
MR All right. I'll take my photo later. But I like to take photos of our studio during our recording session for Instagram. We're on Instagram, by the way @capitalpointmarketing. So if you want to follow us on Instagram, you can see the photos I take during our podcasting.
AG We've had a long couple of days.
MR Yeah, woo. So next on my list -- I love this: emphasis on cloud. This really affects us a lot because we are often talking to banks and credit unions about their websites and building new websites for them. I think even only a couple of years ago, there was a lot of resistance to cloud-based content management systems and marketing automation in the cloud and all this cloud software, and now we're quickly seeing that the consensus seems to be that we really need to move toward the cloud and it's okay. In the past, it was we want to host all our own stuff on site and our own data centers, our own office or something because they want to look at our servers and have control. That's an illusion of control as we know because it doesn't matter where your server's located. Now we're seeing that the consensus seems to be building toward you want to be on cloud services, a cloud-based website, cloud-based CMS, cloud marketing automation. It's actually more secure and more reliable. You were in that session. Are there any other takeaways from that besides move to the cloud?
AG Yeah, and it's more than just the marketing infrastructure. It was the entire IT infrastructure that they were saying consider transferring -- basically consider moving to the cloud because that essentially transfers the risk away from you, as the bank, and to the vendor. Obviously, you need to vet that vendor, and you need to make sure that from a security practice perspective that everything aligns from a regulatory perspective. So it's a little bit more complicated than just switching everything over because you -- as we've said before, you have to select the right software to meet your needs and to meet the security requirements. But he even mentioned things like just the email hosting for a bank, which that was the first I'd ever heard anybody say you should be moving to the cloud for email hosting, which was shocking to me because I never hear that.
MR You mean that people put email not in the cloud? It doesn't occur to me to not have email in the cloud. I know, I know.
AG That's --
MR I jest. I jest.
AG Michael Reynolds is an early adopter on everything so --
MR True. So another big one -- I think last on my list -- if you have a list of your own, we can get to that, but last on my list is brand differentiation. I love this one so much and here's why. You got to reign me in here because I could soap-box for a while. I think we've talked about this before. We had a whole Brand Distillery workshop a few episodes ago where it's a five-part series. I hope you listened to it. If not, go back and grab it. We talked about how to differentiate your financial institution through brand messaging. We are firmly convinced and we are firmly in the belief that financial institutions, in general, are seen as commodities by the public. We just kind of accept this. We know this. We know that under the hood there's some different stuff and we all have different angles, but in general we are seen as commodities.
How do we differentiate? We differentiate on brand messaging. We differentiate on who we serve, what we do for them, how we help them, those are the ways that we differentiate. We sometimes do get resistance from financial institutions who work with us or talk to us or maybe come to a workshop and we tell them hey, here is how you can start thinking about brand differentiation. Sometimes they love it and embrace it and see the vision. Sometimes they don't and they're very pessimistic about the feasibility of differentiating through brand.
One of the speakers that we heard, again, at the MEGA Conference was talking about the future of banking is differentiation through brand, and you've really got to stand out. You've really got to find ways to look and sound and feel different to your audience than the other banks and credit unions down the street. Because if you don't, you're going to blend in with all the noise. And so I was really, really happy to hear that people besides just us are banging the drum of brand differentiation and bold differentiation. Not just oh, it's customer service; our service is better; our interest rates are better; or blah blah. That's all just noise. But you really have to figure out who you want to serve and how you serve them and how you help them. Being bold about it can be scary, but I think that is the future of how you stand out as a financial institution. My story and I'm sticking to it. Are you just in awe --
AG Agree. Well, you know, I was thinking about the Brand Distillery workshop we had right before IBA with directors of marketing from various banks from around the state, and the general feeling that I got from them is that it's a lot of -- they feel like they're going against the grain sometimes because they feel like that the perception of banks in the public eye, that's it's not very good and that they just think that everybody thinks about them in a negative light. And I just think that banks have the power to change that perception and to make it this is no longer the big, bad bank; this is somebody that's trying to change your life --
MR And help you.
AG -- and that can help you and can be a part of your life story, essentially. And I think that as soon as banks -- and credit unions. I shouldn't just say -- the reason I keep saying banks is because we had all banks there at this particular one.
MR It was a banking conference.
AG Yeah. The first financial institution that really embraces that concept and makes that cultural shift, I think, is just going to, by leaps and bounds, outpace their competition.
MR That could be you out there, listener.
AG It could be you, listener. [laughs]
MR Anything else on your list that we haven't covered?
AG Yeah, I want to touch on one thing that I heard about ADA compliance. I went to a session that was all about IT regulations, basically, and how you can stay ahead of compliance. One of the sections of that discussion was ADA compliance. And he said a lot of things about -- there's no regulatory guidance at this point in time in 2018. We do know that there is a piece of legislation that has been going through Congress all about ADA in general, and they've got language in there about websites in this next iteration of it. But it hasn't seen the floor. I think it went through the House. I can't remember if it went through the House or if it went through the Senate. It definitely went through committee. It's something that Congress is looking at. I don't know if it's going to go through in the current administration or not. But it's something that people are starting to talk about because there is no regulatory guidance in this.
His stance was that ADA compliance can be -- basically that you don't need to do anything with it because there's nobody to, there's no regulation in place, essentially, outside of the 12 guidelines. And I don’t think that's correct. I don’t think that's accurate advice. Oh, the other thing he said about not needing to do anything is that -- he kept saying "Plus, Windows can fix all of that stuff. Windows all of the color adjustments for people. Windows does all of the font." And I basically was like you know that not everybody uses Windows, right?
MR Really? People don't use Windows?
AG Shocker. I know.
MR As I sit here in front of my MacBook Air.
AG And I was sitting there -- I was the only one who had my computer out. But everybody at least had an iPad. Nobody was using a Windows-based anything.
AG Wa-wa. But I understand. He was talking to bankers. We understand that they use a lot of Windows machines. I still firmly believe that you should do -- you should provide a reasonable level of compliance from an ADA perspective. Even though he's right; we don't have any type of regulatory guidance on it at this point in time. But you never know when it's going to come into place. Honestly, it's from a usability perspective, it's just good practice, and it's good customer service. So if you're sitting there when I ask you Who's your brand? Who's your differentiator? And you always say "the people; the customer service." This is good customer service. So don't listen to him on that one. Take action on it.
MR Love it. I love it when you disagree publicly.
AG When I get on my soap box? Sometimes I dust it off. Maybe it was the Starbucks beforehand.
MR Anything else on your list?
AG Maybe they should start sponsoring us. Um, no. Nothing else.
MR Okay. Awesome. Well it was a lot of fun. Like I said, good networking. Good stuff. I'm glad we could share some of this with you. If you have any thoughts for what we've talked about, send us a note: firstname.lastname@example.org. I think we are good for today. Thanks, Allison.
AG Thank you.
MR It was fun to review some of that stuff with you and thanks for being there. It was a good conference. Thanks, everyone, for joining us for today's episode. We appreciate you being a listener and have a great day. We will see you next time.