By: Joe Gillen
Many community banks and credit unions learned a long time ago that offering personalized attention to members was the best way to build loyalty and satisfaction. For these reasons, many have seen their community bank and credit union programs swell to new records in recent years, compared to larger institutions that have experienced a decline in membership. While it appears many national banks have not yet caught on, one bank is making stark changes to court its more affluent customer base: HSBC.
The British financial institution has launched a campaign to shrink its existing branches and build more intimate relationships with its top-earning customers, according to American Banker. The news source reports that HSBC has sold off a great deal of branches in large metropolitan areas, such as New York, and is instead building smaller, more affordable branches in other conservative markets.
"Customers don't need [big branches]," Kevin Martin, head of HSBC's North American retail banking and wealth management operations, told American Banker. "They're expensive. Footprint just costs money and at the end of the day, either the shareholder gets less return or the customers pay more. Someone has to pay for all this space you're not using."
Affluent customers get star treatment and services
In addition to providing a cozier environment for its key clients, the bank is also providing more personalized services to its affluent customer base. For example, those who invest at least $100,000 will be assigned personal relationship managers that will make house calls, provide assistance at all hours and help their customers find specialized products and services to meet their specific needs.
While many banks are reticent to make these types of changes and consider this more a niche industry, institutions of all sizes are ramping up their customer services channels to provide more personalized services to customers.
Studies show that online and mobile platforms will play a more central role than branch banking in the coming years, because it provides more convenience and allows customers to monitor their finances in real time. In response, more banks and credit unions have invested heavily into developing these platforms, with smaller institutions evolving their mobile platforms at a faster pace than many large banks. As more consumers flock toward these innovations, smaller institutions are expected to continue gaining a larger market share in the financial industry.