Banking on Digital Growth
Banking on Digital Growth

Episode · 5 months ago

203) #InsideDigitalGrowth - The Sustainable Habitat of Niche Banking


A lot of banks are trying to catch every fish in the ocean. But you don’t need to hook every potential customer in your market - only the ones who benefit from your expertise.

In this episode of our Inside Digital Growth series, I answer your questions about niche banking.

Banks and credit unions have the potential to build niche portfolios that will help common people with their common problems. They simply need to transform their thinking.

Join us as we discuss:

- Growth opportunities and finding a viable niche market (3:58)

- Rejecting legacy rebranding in favor of transformation (11:34)

- Technology as a coaching tool for establishing a niche (16:23)

Check out these resources we mentioned during the podcast:

- Text your questions to James Robert at 415-579-3002

- James Robert Lay

You can find this interview and many more by subscribing to Banking on Digital Growth on Apple Podcasts, on Spotify, or here.

Listening on a desktop & can’t see the links? Just search for Banking on Digital Growth in your favorite podcast player.

You're listening to banking on digital growth with James Robert Lay, a podcast that empowers financial brand marketing, sales and leadership teams to maximize their digital growth potential by generating ten times more loans and deposits. Today's episode is part of the inside digital growth series, where James Robert shares answers to some of the biggest digital marketing and sales questions he gets from the digital growth community. Have a question you want to get answers to on a future episode? visit www dot go ask jrcom to submit your question today. Now let's go inside digital growth. Greetings and hello. I am James Robert Lay and welcome to episode two hundred and three of the banking on digital growth podcast. Today's episode is part of the inside digital growth series where I James Robert Lay, your digital anthropologists commit to continue to coach and guide you and your financial brand orphantech along your digital growth journey, as you commit to guide people beyond financial stress towards a bigger, better and brighter future. In today's episode of inside Digital Growth, we are going to dive into the PODCASTS Inbox, where we've been getting some really good questions from listeners around the world my team. They've done a fantastic job of grouping these questions together to provide you with clarity around a specific area of focus. But before we get too far, if you have a question that you'd like to gain clarity around, text your question to four one hundred and five, five, seven nine three zero zero two. That is four hundred and five, five hund seven nine three zero two and my team will make sure that we get it you get an answer in an upcoming podcasts. So let's jump into today's four questions, framed around a focus on niche banking. Now, I've view niche banking as an emerging trend that will continue to grow an adoption as a competitive strategic advantage for leading financial brands and Fintex over the next three to five years. Niche banking is, in fact, one of my favorite topics to talk to facilitate conversations around in strategic training workshops for financial brands and Fintech, their marketing teams, their cells teams, their leadership teams who are members in the banking on digital growth program niche banking is also been a topic on the podcast. We've had some really good conversations with others and in fact I'll be speaking about niche banking niche growth opportunities to hundreds of credit in leaders attending the see you leadership conference in July. So the first question on niche banking is framed around a deer listener who wrote in and stated, as credit unions and community banks seek to spin off new niche banking products or brands, what should we be thinking about at our organization? They continue how should we go about finding and validating a viable market segment? And they wrap up asking should we start by looking for niche needs and our own customer base, or should we be using market research to look outside? This is a fantastic question to get today's thinking started with and I want to break this down. First, there is a tremendous opportunity really specifically for credit unions and community banks, even Fintex, but I would say for crediting. Is The community banks seeking to spin off niche banking products or brand simply by identifying common...

...people's pain, problems that cause common people pain? Let me say that again. The opportunity is for financial brands and fintext to stop the pause and to identify common people problems that cause common people pain, and you can do this yourself through research framed around an acronym that we teach, where we encourage financial brands and Fintech to go all in on common people problems that cause common people pain. And when you go all in, all is an acronym where number one, a ask real good questions that go beyond the obvious, and there's some skill that comes from practicing asking really good questions. I've always said one of the competitive advantages in a digital world is to get really good asking really good questions. Number two, the L, the first L and all the acronym is to listen to what people are saying, but, more importantly, listen to what they are not saying. And that brings us to point number three. The the the second L and all a L L learn through observing people's behaviors, because people often will say one thing. This is why I think focus groups are a waste of time and I'm really big on observation actional research to to tap more into the thick data, to get into a person's why, but in a one to one environment. That way group think doesn't take over an influence the other eight, nine or ten participants in a focus group. You know, when it comes to where niche banking opportunities might be found, I like to defer to the wisdom from Wayne Gret Ski, because he shared once it is important to skate to where the puck is going, not to where it has been, and this is in reference to do we look inside for niche opportunities or do we look outside for niche opportunities? Research can begin internally, looking for common patterns, common patterns framed around common people problems causing common people pain. Can look internally within custom current customer sets or or a member base if you're a credit union. But the big question to consider is where. Where will future growth come from? Where will future growth of be found? And, if you're looking internally, is it there? I don't know. It's an important question to consider, to think about and furthermore, when you're looking internally or externally, are you even fishing in the right pond to begin with? And could the pond that you're fishing in? Could that pond eventually be over fished? Another concern when looking at and considering...

...a current customer base or member base is scale. So, instead of fishing in a pond, the current pond that you've been fishing in. Should you consider possibly fishing in a larger lake or perhaps even going in finding a blue ocean where there is a sea full of opportunity? However, it is important to keep in mind when it comes to niche, when it comes to nitch banking, you are fishing for certain kinds of fish and really be careful to not cast a two wide of a net trying to catch everything, as this would sink your boat. It's just within an ocean or a sea of opportunity there are even more of the same types of fish that are available to be caught than in a local lake or a local pond, which is where my thinking is framed around. There's a vast amount of opportunity for community organizations, community institutions to consider larger lakes or even blue oceans of opportunities, looking outside the traditional community, and that's because community has been redefined. Community goes beyond Zip code, it goes beyond counties, goes beyond cities and states, even borders. Communities can now be found digitally and established digitally around common purpose, around like minds, values aspiration. The FINTECH has, then, a tremendous job of this. When it comes to their purpose, their positioning framed around the environment and if you haven't checked out aspiration, and I wrote about aspiration making on digital growth, highly recommend go to aspirationcom and consider how their niche, their niche banking opportunity, has a large enough lake, or maybe a blue ocean of opportunity, but it's not for everyone. They are not trying to catch all the fish in the sea. Let's move on to question number two. As another listener writes in and notes, I would imagine starting a niche bank or banking solution is more than just about basic products with the new label slapped on it. They ask, why must my leadership team truly understand the market and then offer unique products that specifically meet those needs? Great Question. First off, I agree one hundred percent. Simply slapping a new brand label on a niche baking solution, if you remain in the status cool, operationally speaking, within a financial brand and in combat, when you slap a new brand label and a niche baking solution, it's the same exact exercise as putting lipstick on a pig. Not only, and we're going to come back to the point of community institutions that only must a credit in our community make truly understand the market they are looking to create value for. They must many times, I would say ninety nine percent of the time here. They must transform their thinking internally to not let their historical perspective, there has their historic culture, their historic processes, their legacy mindset, get in the way be an impediment for future growth for this niche banking brand or product. I have...

...seen this happen of experience this firsthand, where a community organization, very successful, very successful organization, wanted to journey down a path of niche and they launched a niche banking product outside of their corporate brand. But it was the legacy mindset of the corporate brand that was an impediment to the growth of the niche banking brand. And there's no one to blame for this. It was a lack of clarity, was a lack of understanding for what it really would take to launch a niche banking brand and there was also unrealistic expectations of the value that this niche banking brand would create within a very limited period of time. Well, the good news is is, through some training, through some education. Through some resetting of expectations, this nitch banking brand continues to not only just survive but is beginning to thrive, because it's just a different operational mindset than the historic model that, incombat, financial brands have been used to operating around. Furthermore, there are some good news that, through a focus on a niche market, you have the ability, as a financial brand or as a Fintech, to go really deep when the vast majority of other brands have historically gone very wide when it comes to market positioning. Because when a brand commits to go deep, this is when they truly begin to transform themselves, to think beyond the here and now, think beyond their internal perspective, to take an external perspective by understanding the common people problems that cause common people pain within a specific niche market, and from there the brand can begin to craft and create cures, solutions, prescriptions that ease the pain of the people within those niche markets. Furthermore, it's not just crafting prescriptive products and positioning and messaging, but really success growth comes from truly knowing a market's common pain points, because that makes it far easier to produce content and to promote content that helps first sell seconds, that builds trust, that makes deposits in the trust funds of consumers minds within the niche market, to ultimately build a community of like minds, because once again, community has been redefined beyond the physical, tangible world to where community now resides in the hearts and minds of people. Digital growth is a journey from good to great, but sometimes this journey can feel confusing, frustrating and overwhelming. The good news is you don't have to take this journey alone, because now you can join a community of growth minded marketing and sales leaders from financial brands and fin tax who are all learning, collaborating and growing together. Visit Digital growthcom slash insider to learn more about how you can join the digital growth insider community to maximize your future digital growth potential. Now back to the show. Let's move on to question number three.

The listener simply ask, and I like this question, what sort of technologies do we need when starting a niche bank or niche banking product? I don't want to go too far down a rabbit hole of technology for the sake of time, because we could really spend a couple of hours having a very healthy dialog and discussion. But when it comes to technologies, I think mindset trump's technology here, and here's why financial brands that get the closest to the people in the niche markets that they are looking to create value, for those financial brands that get closest to the people through a collaborative, and that's the key words, through a collaborative creative process, will be the ones that win, because it really should be the people within a niche market that provide perspective into the technologies a financial brand or Fintech can provide to solve the common pain points of common people. And these technologies, of course, will vary from whether it is a be to be niche, a be to see niche, or even a be to be to see niche, and I think there's some really fascinating opportunities there when it comes to be, to be to see through the lens of open banking and open finance. Furthermore, opportunities exist here and really begin to grow exponentially when it when it comes to technology. But I think it's important that we simplify the technology perspective, because there's an abundance of technology available to bring together to solve common people problems causing common people pains. But let's come back to the really the three common people problems that we have identified, reflecting back now on twenty years of research and conducting now, at this point, probably close to fifteen hundred digital secret shopping studies where where we look at the positioning of financial brands, of fin texts, through the Lens and through the eyes of real consumers, talking through feelings and emotions and very simply defined, the three common people problems that transcend all niche audiences, that transcend all nichem communities, is people want to fill three things. They want to fill healthy they want to feel wealthy, and wealth does not mean being a bazillionaire. They just don't want to have to worry about money and finances and the stress that comes from that, and they want to feel happy. And the problem when you look at really solution, crafting solutions, crafting cures, the problem with all three of these points, whether it be health, wealth or wellbeing, health, wealth, happiness, the problem is financial stress for consumers, for people as well as for business owners. Financial stress is the number one factor, just the number one problem, standing in the way of realizing these three hopes these three dreams. I want to feel healthy, I want to feel wealthy, I want to feel happy, health, wealth...

...wellbeing. And when we start simplifying complex problems down into what are we really solving? At the end of the day, we want to make people feel healthier, we want to make people feel wealthrough and want to make people feel happier. I truly believe financial brands in fintext have the ability to do that because there are multiple studies available that show the connection and correlation between a person's physical wellbeing and their financial wellbeing, shows the connection correlation between a person's mental wellbeing, their happiness and their financial wellbeing. Transform a person's wallet and you can truly transform their life. And that's why one of the greatest technology opportunities I see year is to provide coaching. It is to provide guidance, it is to provide insight beyond just offering commoditized mobile banking and bill pay and remote deposit capture and we're going to pay you two days earlier. I mean, all of it's all, it's all table stakes. Now the greatest opportunity is to use technology for coaching, coaching that can be further enhanced through financial data, to provide insight, to provide guidance that truly transforms people's actions, their behaviors, their habits that are deeply rooted within their belief systems and structures, their personal relationships that they have with their money. Until we start working and solving that problem, there the future becomes the predictable past, because people's financial problems struggles, challenges for many times or rooted deep within belief systems and structures that they might not even be aware of. And the way that we bring awareness to that it is through coaching, it is through guidance, it is through insight and using technology as a tool to facilitate these activities. Okay, last question for today show is about talent. As one listener ask what about talent? Many niche banks, such as those who are serving doctors or dentists or musicians, they have at least a few people from that particular field within the C suite. So the question that this dear listener asked would you say there needs to be some internal personal connection or someone in the community that identifies with these market segments as an expert? The short answer is absolutely. Niche banks, Nick Niche financial brands must attract talent from the niche markets they are looking to tap into, as this empowers them to build a brand around knowledge, to build a brand around expertise and, once again, not just another commoditize financial product packaged up for a niche market. May pretty putting lipstick on a pig. So attracting talent from a niche market provides really a perspective that that is rooted deeply in what we call banking on expert tease. Banking on...

...expertise will be my third book and I'm putting it out there, due out two thousand and twenty five. Bank you on expertise provides an opportunity position around the production and the promotion of thought leadership, of thought leadership content. Think podcast, videos, articles, white papers, ebooks, even books for that matter. And I'm so encouraged by this because just the other day I was facilitating a workshop for a smaller asset institution, community based, that is now making a nationwide play into a very niche market. Going be to be to see. So there it's value creation on both sides. Its value creation for businesses within within this niche market. It is value creation for consumers that buy from businesses within this niche market, and one of their leaders mentioned in this conversation. We've talked about being a thought leader, but we really don't know how to do that. I said, the fact that you're saying this really gets me excited, because not many traditional or incumbent financial brands, yet, alone community financial brands, are thinking about this yet, alone deploying thought leadership. Thinking they are not banking on expertise. Yet within the proverbial four walls of their organization there is a vast amount of knowledge, there is a vast amount of expertise that is waiting to be shared, that must be shared, because it is through the sharing of knowledge, it is through the sharing of expertise, particularly within a niche vertical. This is how a niche brand brings to bear in the marketplace knowledge expertise, providing a path for them to level up beyond commoditized positioning and promotion of the same great rates, amazing service and look like laundry list of product features every other financial brand promotes. This is why I am so passionate about niche markets and and if you look ahead to the future, what does that future look like? Whenever I was working on my presentation for July that I'll share some of these in sites deeper with hundreds of credit in leaders at the Sea Leadership Conference Out in Vegas. One of the things that I was thinking about was doing some bringing the future into the present moment. I see a future where a community financial brand has the potential to have a portfolio of niche niche banking brands. Think of this like a boutique play. These are like more of boutique brands. So we can learn a lot, and I do this. I like to look outside of the industry to learn a lot of like what's going on. How can we bring the thinking back inside the industry, to transform our thinking, because when you look outside the industry, that is how you begin to see things differently, and when you see things differently, you begin to think differently. But just because you think differently does it mean you're going to do different you must feel different, and that's why some of the stuff takes time, because it's the feelings, it's the emotions, it's the desire to transform, it is the...

...desire to do something different. That must be far greater than the desire to remain the same, to stay stuck in the status quo to stay trapped in the Cave of complacency. And if we look out towards the future, community institutions have the potential to have a portfolio of niche banking brands, boutique brands, that are creating value through thought leadership, through coaching, through guidance, because because it is through that coaching, it is through that guidance, it just through that thought leadership that is how they rise above the commoditization of look alike features. That is how they differentiate and a see of sameness. This has been a lot of fun and, as always, I appreciate the questions that we do get from you, the dear listener. They really helped to keep me on my toes. They challenge me to think even more deeply about the questions that you have on your mind and every single time I do an episode like this, I always see things a little bit differently than how I saw things before, and that in turn makes me think about things a little bit differently than how I thought about them before. So, if you're thinking about a digital marketing or cells or leadership question that you would like to get clarity and insight around, text me that question right now text it. Pick up your phone. Four hundred and five, five hundred seven nine, three zero zero two. Text that question. Two. Four, one hundred and five, fivehund seven nine, three zero, zero or two. There are no bad questions. So, as always, and until next time, be well, do good and make your bed. Thank you for listening to another episode of banking on Digital Growth with James Robert Leigh. To get even more practical and proven insights, along with coaching and guidance, visit Digital Growthcom, slash inside better to join a community of growth minded marketing and sales leaders from financial brands and fintext until next time, be well and do good.

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