Practical Strategies to Address the 10 Top Issues

Facing Banks Today

10 Ten Critical Issues Banks Face

Practical Strategies for Dealing with these Issues

Ideas to Shift from a Transactional to a Customer-Focused Culture

5 Qualities of a Customer-Centered Culture

4 Questions to Gauge Where Your Organization is Today

Tips to Move from Transactional to Relationship-Based Selling

What You’ll Discover

• Increased consumer protection

• Tools for financial crisis

• Tighter credit rating agencies

#10: Increased and Changing Regulations

Grant Thorton Bank Executive Survey

Smaller banks not providing products that increase compliance burden.

To “offset” compliance, become a partner and

focus on customer needs.

Integrity Solution

• Interest rates remain low

• Shrinking retail footprint

• Demise of free checking

#9: Reduced Income and Profitability

In 5 years, free checking has gone from 76 % to 39 %.

2013 Deloitte Study: Retail Bank Pricing

To increase income, build cross-selling skills and a

positive attitude about selling.

Integrity Solution

• Average bank has 2.1 out of 7

• Goal is 4 or more

Key Challenges

• Creating and monitoring effective cross-selling programs

• Lack of service and sales skills

• Siloed teams

#8 Share of Wallet

BAI Banking Strategies: Strategies for Cross selling Forrester Cross Selling

How many products on average does YOUR bank have per customer? 1 - 2 per customer

3 - 4 per customer

5+

To increase wallet share:• Develop listening and

questioning skills to spot additional opportunities.

• Encourage collaboration

Integrity Solution

Work together to spot opportunities

First National Bank of Elk River uses Integrity Selling® when recruiting new business relationships.

“We don’t try to talk prospects into joining our bank; rather we sit down with them and find out what their company and personal goals are. We are able to spot strong potential clients and spend time with them.”

Chad Vitzthum, SVPFirst National Bank of Elk River

“We decided to include back office team members as well as front line team members… this has actually bridged that gap and brought us together.”

Belinda OxfordCertified Trainer

Over 75% don’t consider banks for their advisory, investment, or brokerage activities

#7 Opportunities

Challenges

• “Vanilla products and services”

• Ignoring the mass affluent

• Small businesses not satisfied

Commercial customers have increased their use of credit lines from 30 – 33 % …

Banks building strong relationships have great potential for increased profitability.

KPMGMcKinsey & Co. Private Banking Survey

To capture opportunities …adapt your brand image and

develop advisory expertise.

Integrity Solution

• No difference between X and Y

• Indifferent to a brand

• Overlook complex products

• Expect convenience and transaction technology

#6: Commoditization

As standardized tools give only standardized experiences,

brand differentiation is further limited. Accenture: Banking 2016Deloitte: Brand Commoditization in Retail Banking

To avoid commoditization, make your people

your differentiator.

Integrity Solution

What makes YOUR bank different? Your People?

Your Products?

The Overall Experience?

Your Bankas one of Integrity

Your Product or Serviceas creating value

Yourselfas a person of Integrity

Three Things to Validate

The growing influence of technology on banking functions threatens to commoditize

even the most personalized aspect of traditional models

— the customer experience.

#5: Customer Service

TheFacts:

• 3 out of 4 executives: “Customer experience has improved…”

• 2 out of 3 consumers: “No change.”

• 1 in 3: “I have a problem.”

Banks that respond to upset customers are 2.3 times more likely to retain those customers

than if they did nothing.

KPMG Community Banking Outlook

PWC US Retail Banking Trends: Experience Radar 2013

PeopleMetrics 2013 Most Engaging Customer Experience Study

To improve the customer experience, adapt a common

definition and values for service and sales.

Integrity Solution

#4 Loyalty / Churn

More Facts…

• 2 in 5 switched after bad experience.

• More than 50% opened or closed accounts/services in past 12 months.

• 40% have similar plans in next year.

A most common reason for opening or closing accounts: “the experience with my financial service providers.”

Ernst & Young Global Consumer Banking Survey Bain Report 2012: Customer Loyalty in Retail Banking

To minimize churn, focus on rapport building skills to grow

and maintain customer relationships.

Integrity Solution

Poor service/problem resolution

High fees

Branches not convenient

Products didn’t suit needs

Poor rates on credits/deposits

Reasons for Switching

Booz & co. Small Business Banking Customers An Attractive Segment for Organic Growth

43%

38%22%

20%

15%

• 8 in 10 Americans blame big banks

• 5 years later, 66% are still angry

• More than half don’t believe their bank has their best interest at heart

• 42% feel taken advantage of

• Nearly 50% think they should bank locally

#3 Trust

COMPLETE TRUST:#1 “financial stability”

#2 “the way I’m treated…”

Kasasa Harris Poll: Consumer Banking Insights Study2013 Deloitte Study: Retail Bank PricingErnst & Young Global Consumer Banking Survey

To build or restore trust…connect with customers.

Integrity Solution

Looking at matters from a glass-half-full perspective, the financial services industry has great potential.

#2: Human Touch

The Realities…

• Less opportunity

• Technology doesn’t build relationships

• Branch visits are for problem resolution

TheFacts…

• Web now #1 channel for

banking

• 61% of internet users

bank online

• 35% of smart phone owners

use mobile banking

2013 Pew ResearchPWC Retail Banking 2020PWC US Retail Banking Trends: Experience Radar

60% of great experiences…

involve some form of human touch.

To ensure the human touch, discover what you can

about relating to different Behavior Styles.

Integrity Solution

#1: Customer-Centric Culture

• 61% consider a customer-centric business model to be very important

• Less than 20% are prepared

61%

TRANSACTION MINDSET

CUSTOMERMINDSETGAP

A successful customer experience requires more than transactional skills and product knowledge.

To build a customer-focused culture, shift from transaction

to customer-focused beliefs, behaviors, and skills.

Integrity Solution

So, is GOOD

SERVICE the ANSWER?

PROVEN: Well-executed service programs DO significantly impact on revenue and bank earnings.

So why do so many banks believe they provide excellent customer service --

but still have low RESULTS?

The GAP:

Many customer service processes are not fully integrated into the culture.

5 Qualities of a Customer-Centric Culture

Teams work together to deliver a consistent, memorable customer experience.

Individuals go beyond the transactional experience to build high value customer relationships.

Everyone speaks a common language and exhibits common ethics and values.

Frontline has a positive view of selling and sees themselves as part of the sales process.

All employees believe selling is great for the customer, themselves, and the bank.

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2

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4

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Do you have a customer-centric culture?

To What Degree do Your PEOPLE…

• Understand the components of a memorable customer experience?

• Use a COMMON LANGUAGE and FRAMEWORK for service and sales?

• Take a PROACTIVE approach to problem resolution?

• Develop TRUST with customers and ASK QUESTIONS to identify how products meet needs or solve problems?

To What Degree do Your LEADERS…

• Foster a culture of POSITIVE, CUSTOMER-FOCUSED SELLING rather than a transactional mindset?

• Model and coach customer-centric BELIEFS AND BEHAVIORS?

• Provide service and sales training?

• PROACTIVELY reward customer-focused behaviors and performance?

Value Gap Assessment

www.integritysolutions.com

Congruence Model

View of

Selling

Commitment to

Activities

View of

Abilities

BeliefIn

ProductValues

Congruence

A person’s

attitudes, beliefs and

values have more to

do with the level of success they achieve than knowledge or skills!

Success Factors

Knowledge & Technical Skills

Attitudes, Values, Beliefs, Motives

and Achievement Drive

Congruence Makes the Difference

“Most of the people who’ve gone through our Integrity program said, “Oh, that’s what selling is? Really? It’s just me serving my customer, sharing my knowledge and experience, helping them get the right product and service, or solve their problems? Hey, I can do that!” I’ve really seen a lot of success with that. And giving them a system that works, that’s comfortable, that makes sense -- really helps them succeed.”

View of Abilities scores up 15%

Commitment to Activities up 25%

Goal Clarity up 27%

Values and Ethics

Selling is a mutual exchange of value.

Selling isn’t something you do to people; it’s something you do for and with them.

Develop trust and rapport before any selling activity begins.

Selling pressure is never exerted by a sales professional. It’s exerted by customers when they recognize the value of your products and services.

Selling techniques give way to values-driven principles.

Values and Ethics

From Integrity Selling®

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2

23

4

5

Values and Ethics

Truth, respect and honesty provide the basis for long-term selling success.

Ethics and values contribute more to sales success than techniques or strategies.

Understanding wants or needs must always precede any discussion about product.

Negotiation is never manipulation. It’s a strategy to work through concerns – when customers want to work through them.

Closing is a victory for the customer, the sales professional and the organization.

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From Integrity Selling®

Shared Values Increase Success

President & Chief Operating Officer Rob Stephenson credits Integrity for helping First Dakota

“Integrity and values are very important to First Dakota management…Employees agree that living their values increases the confidence of customers.

The thought that we’re truly wanting to do the right thing for the customer makes it easy for us to sell products. It’s not selling the product of the month -- it’s selling what the customer needs at this moment in time.”

Strategy Summary

1. Become a PARTNER and focus on customer needs.

2. Build cross-selling skills and a POSITIVE ATTITUDE ABOUT SELLING.

3. Develop listening and questioning skills to spot additional opportunities, and encourage COLLABORATION across teams.

4. Adapt your brand image and develop ADVISORY expertise.

5. Make your PEOPLE your differentiator.

6. Adapt a COMMON DEFINITION and VALUES for service and sales.

7. Focus on rapport building skills to grow and maintain CUSTOMER RELATIONSHIPS.

8. CONNECT with customers right from the start and throughout.

9. Discover what you can about relating to different Behavior Styles.

10. Shift from transaction to CUSTOMER-FOCUSED beliefs, behaviors, and skills.

Want to Learn More?

• View recording (video & audio)

• Request copy of slides, bibliography and two free white papers

About Integrity Solutions

• Training industry leader for 45 years

• Trained over 3,000,000 people from

130+ countries

• 200+ leading financial institutions as clients

• Tailored solutions that improve service, sales, and

coaching cultures for banks, credit unions, insurance and

other financial organizations

• Proven behavior change process that gets results

Contact Integrity Solutions at 615.385.2246 or visit us at

www.integritysolutions.com

Thank you

Appendix: Sources

2013 Deloitte Study: Retail Bank Pricing

2013 Pew Research

Bain Report 2012: Customer Loyalty in Retail Banking

Ernst & Young Global Consumer Banking Survey

Kasasa Harris Poll: Consumer Banking Insights Study

PWC Retail Banking 2020

PWC US Retail Banking Trends: Experience Radar