BID® Daily Newsletter
Nov 24, 2020

BID® Daily Newsletter

Nov 24, 2020

Is Suburban Migration An Advantage For CFIs?

Summary: As some people migrate to the suburbs, community financial institutions have an unprecedented opportunity to attract these "on-the-move" customers. We provide three strategies to capture this segment.

According to the National Day Calendar, today is National Sardines Day. You may not run out to get sardines for lunch, but it could be fun trivia to share.
While sardines may swim in the same direction to stay in their schools, we are finding people more easily break away from their surroundings with the right incentive. It's no secret that the pandemic (and the subsequent remote work trend) is shifting people from urban centers to less costly suburban and rural areas, where community financial institutions (CFIs) arguably have an edge over their rivals.
In fact, Pew Research recently found that more than one in five Americans have relocated (or know someone who has) due to COVID -- and that number is believed to be on the rise as consumers and businesses continue to feel the squeeze from the pandemic and opt for lower-cost living and more space. While these changes could create a few negative ripple effects, this trend presents an unprecedented opportunity for CFIs to engage and connect with this influx of formerly city-based bank customers. Here are three ways to reach out to them.
  1. Reach out to your customers first. As Gen Z and millennials return "home" due to college closures or work-from-home flexibility, CFIs will want to be ready. Check in with current customers who may have sons and/or daughters returning as a simple first step. According to Pew, at least 10% of people 18-29 say they have moved due to job losses or changes, or the closure of college-based housing. Since you already have trust within the family, the onboarding of other family members could be quick and easy.
  2. Appeal to diverse customers. According to Pew's June 2020 survey, a larger proportion of those people finding their way from cities to less-urban areas are Hispanic (28%) or Asian-American (24%) compared to white (20%). More than one-quarter (28%) of these on-the-move prospects have a bachelor's degree or higher education too. Knowing this, CFIs will want to tailor their communications to ensure they not only engage these customers, but also fulfill their specific needs.
  3. Promote digital offerings with a personal touch. Urban dwellers are likely used to digital banking options. Yet, many are moving outside of an urban area not just for more space, but also for a greater sense of community and connections. Show these potential customers that you have both. This is an important differentiation from a big bank or digital bank. You may consider welcome packets for those new inhabitants along with discounts to the local businesses. This could be a win for everyone.
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