An Extraordinary Turn of Events... a Discerning Course of Action

WHITE PAPER An Extraordinary Turn of Events... A Discerning Course of Action

Engaging Customers When and How It Matters Most

What can financial institutions do companies are zigging off their usual course, in a national health crisis…one for for this moment in time, to make life better for their customers. The pay off? Stronger which we cannot yet make any clear brands, and deeper customer relationships. predictions? One during which many The value of this goodwill is incalculable. customers are whipsawed by rapid- At Harland Clarke, we are urging our financial fire reporting on virus proliferation, institution partners to step back and consider panic buying of everyday essentials, similarly unique ways to strengthen business and adjusting to 24/7 life at home? for the long term. The opportunity is here now to 1) Build brand equity with your As bankers and partners we, as a practice, existing customers by acting as a trusted look at both financial institutions and other resource during the crisis; and 2) Focus industries for learnings—which we think are on household acquisition at a time when illuminating for financial services firms. In your marketing message isn’t diluted by the midst of the current crisis, we think it is oversaturation. instructive to look not only inwardly, but also beyond for cues and insights to dealing with Building Brand Equity such challenges. This is the time to engage more with your Comcast® has removed broad-band data customers and further build your brand. Here caps while speeding internet access for are three primary areas of focus, with more customers. Airlines are shifting from detail below: irritating, rigid, rules-based pricing models to consumer-friendly fee waivers on 1. Highlighting the myriad of access cancellations and changes. Movie studios options to your institution and your are releasing new movies direct-to-home… services simultaneous with theatrical releases. These 2. Partnering with your customers to help • Person-to-Person transfers (possibly them in this time of need at no fee)

3. Reinforcing the consumer protections • Drive-Up access to bank in-person uniquely available to them because of without direct contact your state or federal charter. • Branch Hours reinforced, kept visible, 1. Access to your institution and your and—most importantly—reported services: Many of our financial institution accurately on your website and across partners have invested heavily in improving the internet. Note that this might digital access for customers over the last require the use of a third party, such as few years. Never have those investments Yext®, with direct access to the digital been more important for both you and your properties that you don’t control – such customers than right now. as Google® My Business

This is the time to work with your • ATMs as a source of quick access to customers to ensure they are fully utilizing funds without human contact those tools. Full engagement with digital PLUS…we strongly encourage institutions tools has proven to be a powerful retention to create a single page on their websites to indicator for financial institutions. We serve as a repository for all items customers recommend that you take a multichannel need to know in the current situation. approach (Display Advertising, Email, Direct Mail, Secure Messaging, Local 2. Partnering with your customers in this Listings, Contact Center, and Social Media) time of need: We feel this is a golden to reinforce the message of access points opportunity to establish deeper bonds to meet the needs of customers. This with your existing customers. First and messaging should reinforce: foremost, this is an opportunity to be their banker not just their transaction account • Digital and Mobile Banking providing provider. We recommend three strategies always-on access to your accounts to further your efforts to become a trusted • Mobile Deposit from anywhere for those partner for your customers: needing to deposit checks In times of turmoil, your bankers can • Under-utilized features of digital banking provide a steady hand to help customers such as budgeting tools and account navigate the current challenge: aggregation • Empower your entire organization, • Bill Payment from the comfort of your particularly your front line, to respond to home and all behind one single secure customers’ needs and concerns. Educate login all employees on your preparedness plan

2 and best practices on communicating • Take a long-term view of your customer with upset or stressed customers. relationships by focusing on lifetime value. Don’t hesitate to waive fees • Offer calls with a personal banker on overdrafts, late payments, account to discuss the current situation and maintenance, and early CD redemptions. the resources you have available for And it is OK to take credit for your customers. customer-supportive actions during • Use any currently idle time amongst these times. staff to “reach out and check in” with • Help them create a rainy-day fund. customers. Provide valuable tips as a trusted resource on • Educate customers on the value of using how customers can make the most of their more of your digital tools – maybe a new-found free time. round-up savings plan.

• Help customers take advantage of free • Encourage your customers to be extra credit reports and help them interpret. vigilant regarding fraudsters – they will be attempting to prey on people’s fears. • We strongly encourage a robust social This might be another opportunity to listening effort to understand the leverage your human presence and conversations and emerging topics offer a call with a banker if they need a amongst your customer base. sounding board to help thwart potential fraud. • Plan for how your contact center is going to route calls and leverage Interactive • Consider the following customer Voice Response as part of this event. messaging. Take the extra time at home to Utilize the full capabilities of your IVR, focus on you: Update all of your passwords including providing estimated wait times (provide best practices); make sure all of and auto-callback. your virus protections are up to date; make sure your Wi-Fi router firmware is up to Utilize your existing capabilities to provide date; change your Wi-Fi password; close true banking solutions to address their old/unused accounts; activate multi-factor current issues: authentication on any accounts where personal information is utilized. • Offer short-term loans to bridge potential financial challenges. 3. Reinforce the message of safety and soundness inherent in traditional financial • Promote skip-a-payment to help reduce institutions: Most critical is the protection short-term financial challenges. afforded by the FDIC and NCUA. Within • Add overdraft protection. the confines provided by these agencies,

3 there are few safer places to keep money customers during these uncertain times is than within a federally insured account. In a positive customer experience…not a sales all likelihood, a new fondness for CDs and pitch. Savings accounts will become a much more critical component of customer portfolios. We expect a significant spike in customer Additionally, it is important to remind dissatisfaction. Many are going to have customers of the protections afforded negative customer experiences throughout by both Regulation E as well as purchase this crisis. They will experience long hold protections on card transactions from times, fee assessments, and challenges Visa® and MasterCard® branded cards. finding quick answers to their pressing questions. The industry as a whole isn’t The safety and soundness messaging prepared to deal with this likely dramatic may become even more important when escalation in dissatisfaction. If you are, that consumers evaluate their non-traditional spells competitive advantage. Fintech relationships. Have the NeoBank, rent-a-charter institutions been fully tested Consumers are looking for reassurance, in a major crisis? Most Fintech companies support, and a financial partner who knows bleed cash, and their ability to continue to them. As a financial institution with a proven receive funding in the near term is likely history of weathering economic challenges, to put extreme pressure on the financial you are well positioned to seize this viability of cash-strapped Fintech firms. opportunity with highly targeted marketing to focus on acquisition – not just during the current crisis, but when the crisis subsides Focusing On Acquisition and economic activity returns. Harland Clarke It might seem counterintuitive right now, but recommends focusing limited marketing your voice can actually be better heard now, dollars in three primary areas: because there is less marketing saturation… less marketing “noise.” Why the reduction in 1. Community involvement and engagement noise? Many marketers have moved to the sidelines. They have shifted to a short-term 2. Bundling of products and services for the focus in the midst of the crisis, and one of benefit of the customer the first things they do is cut their marketing budgets. Harland Clarke advocates, based 3. Concentrating marketing spend on highly on experience, that this is the time to speak efficient consumer targeting as opposed up, not retreat…the time to acquire, not to mass marketing take a pass. An effective, properly targeted, 1. Community involvement and engagement: marketing message that helps your With a highly visible and physical presence in your markets, you have a unique

4 advantage to further elevate your brand position. But don’t just push additional to the top of financial consumers’ minds. services, create a portfolio to support and With the proliferation of Fintech companies help the customer. Think about a product competing with you for customers, the portfolio that inverts the historical thinking. branch network and local presence has As bankers, we typically think: Transact, felt like a liability in recent times. That was Save, Borrow, Invest and Protect — in that then, this is now. We believe your local order. With mortgage refinancing as a presence is now a remarkable advantage potential lead product, we suggest and has never been more valuable. Why? re-ordering as follows: Because within your brick and mortar walls are the beating hearts of real people. • Borrow: Create greater financial Consumers need that assurance right now. flexibility for your new or existing customer by taking advantage of Here are some of our recommendations to historically low rates. leverage this advantage: • Transact: Utilize the obvious opportunity • Promote your position in the community to add a depository account and reward and proven track record of weathering them with a rate advantage on their loan numerous economic cycles and if they also bring direct deposit. challenges. • Protect: In this time of uncertainty, think • Promote your ability to interact and differently about Protect from insurance. consult with your customers, even if by Think about non-insurance based forms phone, which is a true advantage over of insurance. Offer overdraft protection your NeoBank challengers. You are here and do so in a non-punitive manner to help during challenging times, not just for the next six months. Pair that with to handle a transaction. a home equity line of credit to provide cushion in future storms. • Refer a Friend messaging: Leverage the existing customers you have served well • Save: It is hard to save in the midst at this time to spread the word to their of challenges like these, but it clearly friends and neighbors. highlights the need to save for a rainy day. Help your new customers 2. Bundle products and services for the establish a budget and one that includes benefit of your customer: We encourage automatic savings. you to think about your lead product and create tailored product bundles around • Invest: FDIC and NCUA insured Savings, your lead product. With interest rates at Money Markets and CDs may very well historic lows, mortgage refinancing is likely become the new FAANG (Facebook® – to drive mortgage loans to the lead-product Amazon® – Apple® – Netflix® – Google®)

5 Stock as the in-vogue investment as A Positive Message to Propel frightened investors reassess their You Forward investment risk profile. We recognize that we are in uncharted 3. Concentrate marketing spend on highly waters. But remember…we as an industry efficient audience selection: Now that and an economy have weathered tumultuous you have determined your consumer periods in the past. Fortunately, when the portfolio strategy, it is critical to identify current turmoil began, U.S. companies were those consumers that meet your lead the strongest they have ever been. This is a product profiles. Mass marketing has its fact. That, and the resilience of the American time and place, but we feel that in times spirit, will get us through these challenging of major economic disruptions, a highly times. We believe the strength of the greatest efficient marketing approach can provide banking system in the world will help lead the superior results and returns on precious way through our current disruptions. marketing dollars. Those institutions that take this opportunity • Partner with firms that can help you to build brand equity with customers as identify your ideal segments and those a trusted partner during this crisis and that can specifically reach potential focus on acquisition while your marketing customers in those segments. message is not diluted by oversaturation will come through this. And they will • Be extra vigilant regarding losing come through it with stronger customer customers. Make no mistake, your relationships and accelerating customer customers will be evaluating refinancing acquisition above and beyond their peers. alternatives. During the refinancing, if their new partner isn’t you, the odds And don’t forget, a critical part of managing of your retaining their depository through a crisis is preparing for the relationship are not in your favor. Do inevitable exit from it. If you wait until the not allow your customers to take their crisis subsides to plan for a return to business mortgage business elsewhere or the as usual, it is too late—you will be flat-footed entire relationship may follow. and will have missed a golden opportunity. You cannot save your way to prosperity, • In acquisition messaging, reinforce but thoughtful investment in your current all the ways new accounts can be customers and acquiring new customers can opened without the consumer needing help pave the way. to come into branch. If your online account opening experience is subpar, This is also a great time to reconsider the immediately focus on enabling account business case for making channel and opening via phone with both your customer experience investments, which contact center and your branch network. may not have been a priority in the past.

6 All the way up to the Chairman of the Board, Regulated financial institutions are in a executives are likely wishing those critical completely different position going into investments had been made. and coming out of the current crisis. These institutions were, arguably, the catalyst for Customer experience is make or break at what is now known as the Financial Crisis critical times such as these. Your actions of 2008. The industry was crippled coming must be consistent with your message, so out of that crisis with capital constraints, make sure you are walking the talk. Take stress testing, added regulatory burdens, a very critical eye towards messaging and and endless negative publicity. It took years actions and be relentless on consistency to regain firm footing. The situation can be across all departments and all channels. very different this time, because financial Critics will be quick to turn to social media institutions are well positioned to do what if you miss the mark. This may also be an you do best to lead the economy back. opportunity to determine the experience Be a hero! now that you would like to deliver in future, then plan, prioritize, and maximize those investments. You will reap the long-term benefits of hitting the mark on customer experience.

Find out more about how Harland Clarke Call 1.800.351.3843 can help you explore the exciting benefits of Email [email protected] delivering world-class customer experiences. Visit harlandclarke.com