As we have written about before, the hypocrisy and muddled thinking regarding TARP capital from Washington D.C. and the public is astounding. Since it is getting, worse, we are now assuming that this trend isn't going away anytime soon. As such, we are ascribing to that old saying - "when they are trying to run you out of town, get in front and call it a parade."
While not exactly being run out of town, bank bashing seems to be the new pastime. As such, banks of all ilk are missing out on an important marketing opportunity by not better substantiating what they are doing with their capital. While this is especially true for banks that are recipients of TARP, it can apply to all banks. For the next several months at least, banks should consider putting out a series of releases to their local press and political representatives (local, state and Federal) detailing what they are doing in the community with their capital and liquidity.
Step one is to create a metric or series of metrics that you feel comfortable reporting on an ongoing basis. This could be as simple as highlighting the volume of gross new loan production each quarter (or month) or as complicated as providing a breakdown of new loans and refinancings that take place in each lending category. Whatever the case, the objective is to start giving the public information about what is happening with capital and deposits. While banks may argue that you do enough reporting (as banking is one of the few industries that actually has detailed information about operations available to the public), clearly it is not enough. One reason why Washington and the public feels like banks are taking advantage of the taxpayer is that, as an industry, we are not doing enough to provide the proper education. Giving everyone ongoing, quantifiable numbers is the right step in that direction.
In addition to numbers, banks should consider releasing a
series of case studies or narratives about specific instances
where your bank made a difference in the community. This puts a
face behind the numbers and gives the press release that extra
punch, allowing reporters to follow-up. Maybe you can get a
quote that has impact from a recent happy customer. Maybe you
can provide customers that will serve as references. Maybe you
even invite these customers to a community/press event. The
trick here is to provide tangible support for your bank that is
relevant given the economic downturn. In this manner, the next
time banking is accused of the high treason of taking capital
without lending, you will not only have the numbers on your side, but you can say, "I think you ought to call Joanne Billups who owns XYZ Equipment Rental. She seemed pretty happy with her new 10Y fixed rate building loan."
In the same vein, make sure that at least annually, you provide the press and community leaders with everything your bank has done in their districts - Loans, deposits, grants, donations, charity hours, whatever. Having more legislative support is helpful in this day and age. In addition, some banks have used the current
times as an opportunity to make a plea for more DDA/MMDA
deposits in order to support loan growth.
Bankers are a humble bunch, so we know that most never toot
their own horn. However, now is the time to start raising your
profile for the good of the industry, as well as your bank. If you have an effective press release tailored for these economic times that you think other bankers may want to see, forward it over, as we would love to take a look. If not, consider what you could be doing to help turn the current bank bashing parade around.