Is banking boring? Should it be? PNC Bank’s recent “Boring is Essential” ad campaign playfully highlights the enduring strengths of traditional banking – stability, security and reliability. Yet, this tongue-in-cheek message is inherently defensive, a response to the growing challenge posed by neobanks and fintech startups like Coinbase, whose own ad campaign “Side Hustle / Update the System” portrays traditional banking as outdated and ill-suited for the next generation.
These dueling ad campaigns are just one front in the ongoing battle for the hearts, minds and deposits of American consumers. As demand grows for a more transparent, user-friendly financial system that facilitates wealth generation, regional and community banks find themselves at a critical juncture. The collapse of Silicon Valley Bank (SVB) and the ensuing banking crisis have further complicated the landscape, with FDIC consent orders, contentious Chapter 11 hearings and everyday Americans losing access to their life savings dominating the headlines.
Amid this turmoil, banks seeking to embrace digital innovation while maintaining the trust and confidence of their customers must navigate a new communications landscape.
The concept of “Banking as a Service” (BaaS) emerged in an era of low interest rates, low inflation and a lighter regulatory touch towards fintech. Companies like Synapse, backed by major institutional investors such as Andreessen Horowitz, promised to revolutionize the banking industry through partnerships with traditional banks.
For regional banks, partnering with fintech companies offers several advantages, including access to cutting-edge technology, expanded customer reach and the ability to offer FDIC-backed deposits to fintech customers.
However, the recent collapse of Synapse has exposed the risks inherent in these partnerships. As reported by the New York Times, the bankruptcy of Synapse has left up to 100 fintech companies and 10 million consumers in limbo, with many losing access to their funds.
The situation has been further complicated by increased scrutiny from the FDIC, which has placed several banks under consent orders due to their relationships with fintech partners. The FDIC
has expressed concerns about the potential risks associated with these partnerships, including the possibility of fraudulent activities, money laundering and the use of questionable methods to verify customer identities and locations.
In light of the increased regulatory scrutiny on banks’ fintech partnerships, banks must be proactive in their media outreach, providing timely and transparent updates on any FDIC actions or investigations. This may involve working closely with legal and compliance teams to craft messaging that accurately reflects the bank’s position and the steps being taken to address regulatory concerns.
Banks should also leverage their owned media channels, such as company blogs and social media accounts, to provide a clear and consistent narrative around their fintech partnerships. By proactively addressing potential concerns and highlighting the benefits of these collaborations, banks can help shape the public dialogue and maintain the trust of their customers and stakeholders.
Regional banks must invest in their people and technology, empowering frontline staff with the tools and training they need to provide exceptional customer service, while also embracing digital innovation. This may involve partnering with fintech companies that share the bank’s values and commitment to compliance or developing in-house digital solutions that meet the evolving needs of customers.
The rise of niche trade publications and industry-specific news outlets covering the banking and fintech sectors presents a valuable opportunity for regional banks to communicate their unique value proposition to a highly engaged and relevant audience. By leveraging these platforms, banks can showcase their expertise, share success stories and position themselves as thought leaders in the evolving financial landscape.
For communications professionals in the financial services sector, the convergence of traditional banking and fintech presents both challenges and opportunities. By developing effective communications strategies that prioritize transparency, innovation and customer trust, you can help your organizations navigate the complexities of the fintech frontier and emerge stronger than ever.
In a world where banking is anything but boring, your role in shaping narratives, managing crises and building trust is more critical than ever. By staying informed about regulatory developments, embracing new communication channels and preparing for potential challenges, you can guide your institutions through this period of transformation and uncertainty, ensuring they continue to thrive and grow in the years ahead.
Doug Hesney is a Senior Vice President and Head of Financial Communications at Cognito’s New York office
