Magazine article American Banker

Marketing Especially Hard for Small Banks in Digital Age

Magazine article American Banker

Marketing Especially Hard for Small Banks in Digital Age

Article excerpt

Byline: John Reosti

If you ask bank marketing officers how the job has changed over the years, they're likely to mention its expanding responsibilities. That goes double for the smaller banks.

At Berkshire Hills Bancorp in Pittsfield, Mass., for example, Elizabeth Mach, the vice president for marketing, plots brand strategy and produces promotional videos. She is also responsible for fixing the bank's website when it crashes, maintaining the phone system, and writing the rules and disclaimer documents for contests promotions.

It's a challenge that vexes marketers at larger banks, too. "The role has become so diversified in terms of its skill set," said Chris Dods, CMO at the $18.7 billion-asset First Hawaiian Bank in Honolulu. On top of the traditional advertising function, "you have to understand finance, business analytics and operations."

Berkshire Hills only recently passed $7 billion in assets. Most of its growth has come in the past five years, so it continues to operate much like a community bank, said Mach. According to Federal Deposit Insurance Corp. and company reports, while Berkshire Hills' assets have grown 160% since 2010, its marketing budget has increased a less robust 46%.

"We've gone from a community bank to the regional level, but the department doesn't expand at the same rate as all that growth," Mach said. "You always want for resources. The challenge is how you leverage the resources you have."

Judging by the record -- Berkshire Hills has won three Telly Awards from the Academy of Interactive and Visual Arts for its commercials -- Mach appears to have coped just fine. The situation at some other banks doesn't look as bright, though.

At least one longtime bank marketing executive believes the burden of implementing effective marketing programs on what often are shoestring budgets has contributed to decisions taken by dozens of community banks to sell themselves.

"We're living in an age of disruption and a lot of banks aren't prepared to deal with it," said Kevin Tynan, senior vice-president for marketing at $832 million-asset Liberty Bank for Savings in Chicago. "Many CEOs have chosen not to compete."

Mobile banking has emerged as one of the biggest disruptors. But Tynan and other experts maintain the biggest problem for many small banks is that their marketing programs have gone stale. For too many, marketing remains bounded by three time-worn pillars: advertising, direct mail and public relations.

"Community banking has never had proficient, astute marketing," Tynan said. "We never adjusted to the competitive environment and now we're confronted with digital challenges."

Neal Reynolds earns his living selling customized marketing tools to financial institutions. He serves some big banks, but most of his clients are small banks and credit unions. Those bankers, he said, are busy grappling with a multiplicity of compliance and information technology issues, not to mention the day-to-day concerns of running their banks. Few are disposed to invest much time, patience or money in enhancing their marketing.

"They've got compliance costs, insurance costs, director costs and they're all going up," Reynolds said. …

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