By: Jessica Duncan, Senior Direct of Insights
The collapse of Silicon Valley Bank (SVB), which occurred in swift and dramatic fashion recently, has been called the biggest bank failure since the Great Depression. The buzz at Competiscan was reminiscent of the early COVID-19 days when companies were faced with unprecedented situations. Clients were anxious to learn how financial institutions responded to the news of SVB’s shutdown as they considered their own plans of action.
While the desired outcome of this marketing effort was relatively simple – alleviate customer concerns – however this was a complex and somewhat chaotic situation. By Monday, the higher-ups at financial institutions were likely asking themselves a number of questions: Do we need to address this news? How can we provide peace of mind and prevent customer panic? What is the best messaging strategy? How should we deliver the message?
NerdWallet, one of the first companies Competiscan observed reacting to the news, released a message late Friday through its “News You Should Know” email template. The subject was an eye-catching headline: “This just in: A bank collapsed – now what?” The email was aimed at alerting NerdWallet customers, who may also have been SVB account holders, to the crisis. NerdWallet’s experts briefly explained the existence of FDIC coverage for depositors and encouraged the reader to check out an article on the topic. As news coverage quickly ramped up over the weekend, social media became the channel of response for investment firms and financial institutions to assure customers there was no impact to them. Then, by Monday morning emails were sent by banks, credit unions, investment firms, and even payroll companies, addressing the shutdown of both SVB and Signature Bank in more detail.
We noted three main messaging strategies from financial institutions, and in this edition of Commentary we explore how companies worked to alleviate concerns by: 1) Providing reassurance 2) Educating customers about why the bank failure happened, and 3) Conveying the resilience and stability of their respective brands.
This was the most popular response tactic taken within the banking sector. Community banks and credit unions were observed responding to the news in higher than larger banks. Email was used to pen a message to customers that provided assurance their deposits were safe and the institution was financially secure. Occasionally, very specific references to financials were included. For example, San Mateo Credit Union spoke to its Net Worth ratio and how they exceeded the NCUA standard for being “well-capitalized.”
Financial institutions educated customers on why SVB closed in effort to provide an added level of assurance.
Ellevest, an investment firm designed for women, was straightforward and honest in its approach. They explained the SVB failure in a palatable way, while also attempting to predict customers’ questions. Lastly, they offered some insight into what could happen next. Elsewhere, other investment firms held impromptu webinars or offered other opportunities like podcasts for clients to listen to experts address the news and receive relevant market updates. Notably, Aspiration informed customers that their deposit protection was unique. They used oversized font to state that customers’ deposits were insured up to $2.25MM.
Over the past week, we saw financial firms emphasize resiliency. Notably, many expressed their ability to weather future marketplace volatility. To build confidence among customers, institutions relied on references to their history and number of years in business, or used phrases like “ample liquidity, “diversified business,” or “solid asset performance.”
The FDIC and other government bodies took quick action to protect depositors of both banks that failed last week and to stem further crisis in the banking industry. However, it’s likely there is still a lingering feeling of ‘what’s next’ among the public. Financial institutions should consider maintaining an increased level of communication, ensuring customers feel that their accounts and financial relationships are in solid hands.