The Power of Listening: How Community Surveys Can Transform Your Lending Institution

In the competitive landscape of financial services, it's not enough for lending institutions to simply offer products and services. To truly thrive, make a positive impact, and meet regulatory obligations, institutions need to deeply understand the communities they serve.

This is where the power of community research comes in. By actively listening to the voices of the people, lenders can gain invaluable insights that drive strategic decision-making and foster stronger, more resilient relationships within their communities.

Measuring Community Perceptions:

How a bank is perceived in a community is crucial to its success both competitively and in the complex regulatory environment they face. Community surveys can provide critical market intelligence on not only how well they are perceived within the market, but more importantly, in relation to other institutions. Surveys can measure:

• Overall opinions about local banks and their services.
• Differences in perceptions among various demographic groups.
• Specific areas where banks are seen as performing well, and areas for improvement.
• Reasons for customers closing banking accounts.
• Reasons for not having a banking account.
• Specific credit and other financial services needs
• Evaluation and importance of the branch network

This data can help lenders identify any negative perceptions they may have and understand how to better serve their community and customers. It also allows institutions to evaluate whether they are meeting the needs of all segments of the community, potentially exposing gaps that could have regulatory consequences.

Understanding the Unbanked and Under-banked:

A priority for bank regulators has been to expand access to traditional bank services. One of the primary benefits of conducting survey research is the ability to identify and understand the unique needs of the unbanked and under-banked populations. These are individuals and households who either don't have traditional bank accounts or rely on alternative financial services. Surveys can reveal:

• The size and characteristics of these populations.
• Their specific financial needs and challenges.
• Their attitudes towards traditional banking institutions.
• Their usage of alternative financial services, like check-cashing, money orders, payday loans, and rent-to-own services.
• The reasons behind using these alternative financial services, including convenience, speed, and ease of qualification.
• Opportunities to reach these segments

This knowledge is crucial for developing targeted products and services that meet the needs of these under-served groups. For example, a survey might reveal a strong preference for in-person banking services, which could inform decisions about branch locations and staffing. It may also point to the need for alternatives to current services, like pre-paid debit cards in place of money orders.

Tailoring Services and Strategies:

By gathering and analyzing community feedback, lending institutions can make informed decisions about:

• Product Development: Create tailored products and services that address the specific needs of the community. For example, the survey might reveal the need for small, easily accessible loans.
• Service Delivery: Optimize how banking services are delivered, based on community preferences. This might include offering extended hours, more ATMs, or enhanced online banking options, depending on the data.
• Community Outreach: Engage with the community through targeted programs and events.
• Strategic Planning: Develop effective strategies for reaching the unbanked and under-banked, and gain more customers.
• Marketing: Improve messaging to build trust and promote financial inclusion.

The Benefits of a Proactive Approach:

Community research provides a proactive approach to understanding the financial needs of the community. Instead of reacting to problems or trends, lending institutions can use survey data to:

• Identify opportunities for growth and expansion.
• Build stronger relationships with customers.
• Enhance customer satisfaction.
• Fulfill their missions of serving all members of their communities.
• Create a positive impact and contribute to financial well-being.

Conclusion

In conclusion, research is an essential tool for lending institutions seeking to thrive in today's complex world. By actively listening to the voices of the community and using that information to guide their decisions, lenders can strengthen their institution. The benefits of a proactive, community-focused approach are clear: deeper understanding, tailored solutions, and a stronger connection with the people you serve.