By Stephanie Wang, Partnerships
On May 22, 2018, Congress passed a series of revisions to the Dodd-Frank Wall Street Reform and Consumer Protection Act, arguably the most drastic financial regulation revisions to be passed since 2010, when the Act was passed.
Dodd-Frank was originally passed as a crisis prevention response to the 2008 Financial Crisis. The approximately 22,000 pages of new and expanded regulations were intended to increase compliance monitoring, and establish federal institutions, such as the Financial Stability Oversight Council (FSOC) to monitor potential risks that the financial services industry may have on the United States’ financial stability, and overall, mitigate the concept of “too big to fail.” The problem with the law was that it had what the New York Times called a “Wall Street Focus.” It subjected regional and community banks to similar compliance requirements to larger banks, causing them to spend additional money on hiring compliance officers and time on filing reports.
Forbes reported in 2015 that “Data from FDIC-insured institutions [showed] that the proportion of commercial and industrial loans under $1 million (used to measure small business lending) [had] fallen to 21% of all commercial loans from a peak of 34% before the ‘credit crunch’.” This drop reflects the increased difficulty for small businesses to qualify for loans as well as the lengthened lending process banks had to go through. These issues gave rise to alternative lending “FinTech firms” (e.g., Lending Club, On Deck) that specialize in online lending to small businesses and individuals. These firms provided an accessible, efficient alternative solution to traditional lending. In 2014, 20% of small businesses applied for loans with these firms (Forbes). Due to the rise of alternative investment FinTech firms, small and midsize banks had to deal with losing clients to these firms and shrinking deposits.
The Dodd-Frank revisions make it easier to small and midsize banks to issue loans. However, with FinTech firms still popular and receiving backing from Wall Street firms, banks still have the challenge of finding solutions for attracting new customers. The number of deposits made in regional and community banks has steadily shrunk since the 2008 Financial Crisis and despite how banks currently have enough deposits to cover loans, they need to increase deposits for long term growth. This is where clever, data-driven marketing plays a significant role.
Our Regional Bank Client founded more than 100 years ago lost many of its customers after they had retired and moved. To attract new clients, we helped our client create a new brand image and issue a competitive offer package that would compel new customers around the country to make deposits. We created a highly personalized, scalable national campaign that maximized CPMs with the lowest possible cost. Our campaign was not only proactive; it responded to targeted audience members’ responses. If the people we targeted did not convert after seeing the ads for the first time, we retargeted them with more personalized ones. As ads ran, continuously tracking comparable interest rates to make sure our client’s rates were competitive and advertised. We actively monitored each step of the DR campaign to understand how to best optimize our advertising dollars.
By offering an investment package that differentiated it from its competitors, considering its potential customers respective interests, and modernizing its brand image, our client, with our consultation, got an 800% return on their ad spend in 1 month and retained a 3000% return by the end of the campaign. Within a year, our client not only became nationally recognized, it secured $750 million in new deposits around the country.
Working Media Group is a strategic, data-driven agency that helps clients to successfully navigate the complex media landscape and drive business results.
Infographic source: https://guides.law.fsu.edu/doddfrank