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Will Movement Make Banks Remember, Remember the Fifth of November?

Perhaps this isn't just the stuff of movies after all.

Smaller institutions may leverage outrage behind “Occupy Wall Street” and “Bank Transfer Day” to their advantage if they know how to act instead of analyze.

You’d like to think they saw this coming. You’d like to think they wouldn’t be surprised. And at the end of the day, I’d expect the biggest banks in America, including Chicago’s, to still be standing tall. Yet the movement known as “Bank Transfer Day” is gaining momentum and it’s important for all of us to note the new speed with how audiences mobilize, no matter where we stand on the issues. For marketers of financial products and those of us who advise them, it represents an opportunity to listen to audiences and pause before considering what to do in the name of getting more money from customers without giving them something in return.

Why? Because of this writing, one person is having an impact on what 25,978 people may do toward their bank on November 5th. And that’s just today. What will that number be by November 5th?

Organized by Kristen Christian, Bank Transfer Day is imploring people to move their funds from major banking institutions to non-profit credit unions on or by November 5th. The point of doing so is to send a message to the largest banks that there are consequences for unethical business practices. Christian isn’t trying to install anarchy or any more economic instability than what’s already in place.

Rather, as she told the Village Voice and KTLA Los Angeles:

“It’s not about people taking their money and burying it under their mattress. It’s shifting the money to a company people respect the practices of. If you don’t like Wal-Mart’s practices, shop at a local grocery store instead.” 

Christian is a 27-year-old who has banked at Bank of America, both personally and professionally. But she found her breaking point when B of A charged bank fee after bank fee. When she called into the bank because the site was down, she was charged two dollars. When she took her mother to brunch, her mother wound up paying for it because Christian’s account was frozen for three days due to suspicious activity – without any communication from B of A.

Many people who bank with institutions like this have a similar customer service story to tell. The more of them there are, the easier it is for groups to mobilize.

Is there a lesson for smaller banks and others in the financial industry in positioning themselves in this “recovering” economy? Absolutely.

While credit unions are the benefactor in this case, there’s no reason why others, such as community banks, can’t also benefit as long as they don’t act oblivious to current events and remember a few key points in their positioning/re-positioning:

If you raise a fee, there could be consequences beyond a few angry letters and posts online. What Occupy Wall Street and now Bank Transfer Day are showing institutions of all sizes is that there is a very real emotional limit to bank fees.

On the basic level, there is anger and frustration, where people throw their hands up in the air and say, “This is ridiculous and stupid. But what are you going to do?” Then they ask each other what they want for dinner.

Then there’s another layer where you’re ticked off enough to withdraw your account in favor of another institution.

Well, this is actually the point beyond that. 

What we’re witnessing is a new point where people are withdrawing accounts and organizing in order to bring like-minded people with them to send a clear message. And I don’t believe it’s going to end on November 5th either.

Regardless of politics, people are making a grave mistake by marginalizing these types of movements (right and left, mind you), because in a world where it’s not about size of crowd but how well the message is distributed through channels such as social media, a great deal of impact can be made one way or another on a brand. True, the world won’t pay as much attention to a couple people with signs. But I think we can all agree Occupy Wall Street has been greater than that. 25,978 people who sign up for Bank Transfer Day via its Facebook Page is greater than that. The story has the potential to spread far beyond the physical location (if we learned nothing from the uprisings in Egypt).

To ignore that sentiment without addressing it is shockingly short-sighted, if not arrogant. It is at this moment that smaller financial marketers at the community level (banks, financial advisors) should look at themselves and say:

“We’ve got an opportunity here to be portrayed in a light apart from our much larger colleagues. They’re doing us a favor, really. Whereas we might’ve been lumped in with them at one point as ‘Financial Institutions,’ they’re the ones getting hammered in the press for what they’re doing wrong. They’re fragmenting our industry in a good way and we should take advantage of the moment to tell our own story, how different we are from them. We need to show that when people trust us with their money, we’re not going to gouge them to death with ticky-tack monthly fees, nor are we going to do things to do their account without telling them.”

I wonder how many community banks are having that conversation within their walls. Because they should. Now. People are literally taking to the streets and to the web in anger directed primarily at your competitors. And you won’t address that raw emotion because you want to stay above the fray? Because you won’t talk directly about what’s going on in a financial industry where trust is being eroded and what you want to do to fix it? Mistake. Huge mistake. Lost opportunity.

In fact, the issue doesn’t even have to be about how large or small the bank is but rather what it believes in opposition to its counterparts getting hammered in the media and conveying that differentiation clearly.

It’s possible some people who said “I’m attending” Bank Transfer Day won’t ultimately transfer funds from one bank to another. But the larger picture here is that they want to show solidarity and identification with a group against large bank brands. That matters.

It’s also possible that some people will say, “It doesn’t matter because it’s not like these banks are going to be hurting in their bottom line from this. Get real.”

That’s probably true. But I’ll go out on a limb and say any company that takes a “who cares what they think” attitude toward their own customers as long as their numbers are good won’t be doing wonders for their long-term brand perception.

What are your thoughts? Do movements like Occupy Wall Street and Bank Transfer Day change your feeling toward your financial institution? Or does it have little effect on how you view it? If you’re in the industry and feel comfortable commenting, what are your thoughts as well?