Retail Banking

Marketing in an Economic Downturn

COVID-19 has evolved beyond a pandemic in the public health domain extending into the financial markets as a catalyst for an economic downturn. The financial services industry plays an instrumental role during economic events and the retail banking sector has a front-row seat in navigating turbulent waters for consumers and small-businesses. Compassionate understanding of consumer needs accompanied by contextual responses will not only provide stability to your consumer base, but also a pathway to business growth.

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Step One: Fulfill Your Purpose

Retail banks are conduits to credit for individuals and businesses. Consumer confidence may be shaky right now, but this is also an opportune time to over-deliver on inspiring trust and building better lives and communities, which requires a multi-pronged approach.

  • Client safety is always top of mind.

    • Enact measures to sanitize retail banking locations
    • Promote digital and phone interactions, where possible
    • Communicate new procedures to clients
  • Let clients know their money is safe.

    • Issue a perspective on COVID-19 as it relates to the credit markets
    • Remind consumers of FDIC protection on up to $250K per account
  • Compassionate client service & solutions.

    • Listen with empathy on a human, individual level
    • Solve with both the client and your business in mind
  • Take care of your team members.

    • Invest in your financial representatives through training, counseling, and clarity on employment continuity practices
    • Recall that your team is at the front-line of client interaction and the driver of client satisfaction
  • Ensure uninterrupted service.

    • Provide guidance on banking services in the era of social distancing
    • Make customer service available through multiple channels like AI-based chat and off-shoring to accommodate increased service inquiries
  • Proactively communicate.

    • Answer the question before it is asked
    • Address high-level client needs with mass market communication
    • Use a targeted approach to fine-tune the conversation with client segments

Step Two: Tailor Your Products to the Client Needs in a Downturn

Your consumers are going to react differently to the economic headwinds. Taking into account the difference in those needs is both good customer service and good business. A nimble interdisciplinary team can profitably develop and fine-tune the financial products, but the marketing team will lead both demand generation and cost reduction for the consumer and the business.

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    Segment 1:Clients in Hardship

    This group is the most affected by an economic downturn. With interruptions to their employment or small business, they are experiencing shock and anxiety about survival, and are likely more focused on the short term rather than the long term.

    Product alignment:

    Relaxed payment schedules, payment holidays, loan modifications

    Targeting signals:

    Decrease in deposit levels, increase in non-performing loans, increase in revolving balance

    Marketing channels:

    • Outbound CRM to target list to enlist handraisers
    • Digital tools to standardize intake of information
    • Banking specialists and offshore support to finalize products


    • Downside protection by providing liquidity runway
    • Future revenue in the form of deferred origination fees and penalties for securitized loans
    • Increased consumer satisfaction creating future loyalty and advocacy
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    Segment 2:Cautious Clients

    This segment has enough cash to weather the storm, but they are still cautious because of uncertainty in their employment or business performance. Despite an overall rational perspective, they have a lingering sense of unease.

    Product alignment:

    Financial fitness tools, bundled products with net savings in rates, loan consolidations

    Targeting signals:

    Debt/equity ratio, inflow/outflow ratio, minimum deposit level

    Marketing channels:

    • Digital advertising and CRM to enlist handraisers
    • Financial fitness tools to educate clients and qualify lead generation
    • Banking specialists that pick up where CRM funnel left off


    • Encourage existing clients to bring external accounts in-house to increase AUM
    • Build trust and drive future cross-sell
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    Segment 3:Growth-Oriented Clients

    These clients are financially savvy. Although they are impacted by the pandemic on a human level, they take a long-term view about financial management and look for smart investment opportunities, even at this time. They may be looking to purchase a first home, add to their real estate portfolio, or make other investments.

    Product alignment:

    Mortgage origination, mortgage refinancing, lines of credit, business loans for investment, HNW products and services

    Targeting signals:

    Increasing deposit values, refinancing or inquiries

    Marketing channels:

    • Outbound CRM to target list to enlist handraisers
    • Digital tools to standardize intake of information
    • High-touch banking specialists


    • Cross-sell products and services
    • Migrate clients on the HNW cusp into Private Banking
    • Create loyalty through surprise and delight

Clarity of business goals across individual segments will inform strategy development, whereas a portfolio view will balance demand generation with margin protection. Additionally, proactive communication helps to identify downside risk and give clients the tools to navigate financially as opposed to moving into the non-performing loan category.

Step Three: Position for Growth Upon Economic Recovery

Consumer attitudes toward retail banking are bifurcated. On one hand, it is a highly considered category, given the emotional nature of personal finance. On the other hand, there can be indifference in the choice of a retail bank, which is further exacerbated by the switching costs of moving money.

However, financial crises become high inflection points when consumers pay disproportionate attention to their accounts and financial institutions. The present time is a unique opportunity to grow deposits of existing clients, as well as a time to prospect new clients, who may be dissatisfied with their current banking partners. Two groups are of special consideration here — millennial HENRY’s and pre-retirees.

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    The High Earner, Not Rich Yet segment has the cash flow and banking journey that make them attractive consumers. The current economic situation heightens their attention to their financial plan. Targeting them with financial planning tools, products that match their needs, and a differentiated level of service relative to competitors presents the opportunity to prospect this group.

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    On the other end of the spectrum, pre-retirees are in a precarious position during downturns as they see their nest egg dwindle, which disrupts their retirement plan and timing. This heightened level of focus is an opportunity to capture those who are dissatisfied with their current bank.

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    Strong SOV

    From a competitive share of voice perspective, economic downturns are opportunities to gain share points efficiently. Given that competitors are likely to pull back media spend, over-indexing on industry spend in the target geographies is an opportunity to cost-effectively build awareness and consideration. Additionally, industry-wide cancellations of media buys are increasing inventory and present an opportunity for favorable investment scenarios.

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    Digital Tools

    Given the current environment of social distancing, digital tools have become increasingly important. Consumers will adopt digital channels by necessity and are likely to continue to use them in the future. Using this moment to develop pilots will also provide the ability to test and learn features that can be scaled into programs of digital leadership that can kick off at signs of economic recovery.

Do good things.

Undoubtedly, the challenges associated with COVID-19 require time, attention, and a commitment to public health and safety. As humans, we must all do our part to help others. As business people, we must also recognize that this is a passing moment and keep an eye on our resilience. Our consumers, our employees, and our businesses rely on us to serve them both in times of crisis and times of confidence.

Our motto at 22squared is "Do good things." Our commitment to our client community has never been stronger. As you sort through the implications to your business, please reach out to us for a conversation and thought partnership.

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