Reassuring Confidence in Community Banking

11/5/2008 - Over the last few weeks, several of BLF Marketing's clients have implemented communication initiatives that reassure customers about the safety of deposits in their respective community banks.

Fortunately, most community banks are poised to share a positive message that is supported by several important points:

• The Overall Health of Community Banking is Relatively Strong — The major credit and liquidity issues are centered on larger national and regional banks.
• Increased FDIC Coverage — The Federal Deposit Insurance Corp. (FDIC) moved to temporarily increase insurance limits to $250,000 (per customer) through December 31, 2009. In addition, the FDIC is offering to insure the full deposit amount (over and above the regular $250,000 coverage) on all non-interest bearing deposits for a charge.
• Rating Services — Independent services such as Bankrate.com and Bauer Financial provide public ratings of community banks. These designations, often in the form of "star-ratings," are based on financial safety, soundness and capital requirements. The public can view and compare financial institutions on their respective web sites. Banks that have favorable ratings have an opportunity to attract new customers and/or additional deposits.

The communication method has varied from bank to bank, but most have utilized print ads, lobby merchandising, website articles and teller handouts. In many cases, direct communication between banking officers and key customers will help protect or shore up customer confidence. BLF has also assisted bank CEOs in writing guest columns and articles for a local media angle on the relative safety of deposits in community banks.

As leaders in our industry and communities, we need to remain positive during these uncertain times. Obviously the national media has done little to allay even the most irrational fears.

At BLF Marketing, we use the term "nervous money" to refer to cash that has been pulled out of the stock market ... or withdrawn from a "merged bank" ... or diverted from a high risk investment. Through innovative deposit product design — combined with communicating strengths and stability of the community bank — our clients are well positioned to convert "nervous money" into new sources of deposits.