Publishers Forum
Innovation in Banking / by Lawerence Amaturo / October, 2019

Banking. Insurance. Investing. This month we dig into three of the primary industries that support and stabilize the North Bay, and I welcome you to this very important issue. Stale topics? Hardly. Industry leaders must innovate to merely survive in these fast-paced times. Gone are the days of half-day Fridays and we'll-figure-it-out-after-our-golf-round Wednesdays.

Today, increased competition, regional takeovers and technology advances are making the game tougher, not easier. Profit margins have thinned, while the cost of acquiring new customers has grown, a treacherous combination on any firm’s P&L Statement. For decades, banks successfully acquired new depositors with catchy slogans and marketing gimmicks. But by 2016, only 8 percent of U.S. depositors were willing to switch over savings from one primary bank to another. By 2018, that percentage had dropped by half to just 4 percent. Certainly, tightening interest rate offerings have diminished the reason to switch banks in the first place. But online banking, and the effort one must make to integrate auto-bill payment information, for example, has made the effort to switch that much more laborious.

National bank brands are exiting physical locations, grocery store branches and proprietary ATM assets. Their one-size-fits-all strategy may reduce costs and personnel, but it’s opened the door for more nimble operators to grab market share. Meanwhile, pop-up “virtual banks” such as Ally, Tangerine and Monzo, are especially attractive to the Millennial generation of banking customers. Their appeal is mostly due to a smorgasbord of free stuff such as money-back credit cards, low- and no-fee investment services, and tax-free savings accounts. Millennials now make up 25 percent of the digital bank customer base, threatening the former we're-here-for-you model of traditional banking. This is of great concern to some local bankers, while others point out that Millennials are simultaneously high maintenance and broke.

In the midst of all these dynamic forces, sometimes sticking to the basics can make all the difference. I had the recent pleasure of a long sit-down with serial entrepreneur Jon Kelly. Now in his 80s, Jon is nonetheless a tireless, youthful entrepreneur at heart, who is passionate about building a myriad of businesses in media, advertising, real estate development, finance, and yes, banking.

On the back of a cocktail napkin, Jon laid out the premise for Sacramento-based River City Bank more than 45 years ago. He knew it had to stand apart from other banks to turn prospects into depositors. In his words, his unique point of difference was to shun the marble floors, high ceilings, and oak panels that were then customary in the industry, so as to appeal to those customers who felt off-put by such pretentiousness. Instead, Jon carpeted his bank floors so young children could play comfortably, while their parents were occupied by tellers and loan officers. He also installed antique (and rather noisy) riverboat whistles on the roof of each branch to establish a unique audio identification for his bank.

It’s fair to assume that Jon hired mostly young, attractive females as tellers back in the day. He uniformed them in outfits that caught the eye of most gentlemen. Most definitely a politically incorrect strategy in today’s world, but human nature being what it is, it worked.

Jon also created a jolly, Hawaiian-inspired character named “Moolah Moolah,” who encouraged kids to save their coins so they could begin their own bank accounts. He was pictured at every branch to welcome children up a flight of stairs that was covered in flowers, grasses and Hawaiian leis. “Every business needs an audio and visual identity,” Jon advises. “Research everything. Create a 10-year business plan for each of your businesses!” Jon would be embarrassed if you knew how his hard work and creativity, along with the efforts of his family and team, have contributed greatly to his success over the years. Jon’s tireless pursuit of success has always been more appealing to him and his family than the display of that success.
You'll find more great guidance in the feature “Refreshing a Brand” by Jean Doppenberg. There's much to learn from businesses like Summit State Bank as well as Poppy Bank when it comes refreshing a brand, or rebranding your business. And in the feature, “Banking On Cannabis,” you’ll find out why North Coast Credit Union took a risky leap to handle banking transactions for this industry.

In the meantime, follow Jon’s lead and make sure your business has a unique audio and visual identity. Shout it from the rooftop, and let's keep building our markets! Share your successes and trials with me. I benefit from hearing both the success stories and the failures in the world of business. Let's learn together as we continue to rebuild a thriving North Bay. My email is, and I look forward to hearing from you!