Why Your Community Bank Should Offer a Switch Kit

The thought of switching to a new bank can feel overwhelming for potential customers. Often, they believe the bad experience they might be having at their current bank doesn’t outweigh the work they would have to do to switch to a better bank. 

“It’s probably the number one reason that we get from people for why they don’t want to switch banks,” says Taryn Marino, senior vice president and chief retail officer at $3.3 billion-asset F&M Bank in Archbold, Ohio. 

Banks have long used “switch kits” to help remove pinch points to changing accounts, and those resources are increasingly leaning on technology to streamline the process. This is especially useful considering people’s increased use of ACH to pay bills: Consumer bill payments surpassed 16.38 billion individual transactions last year, valued at nearly $11 trillion, according to Nacha.

So, how can community banks improve the switching process for potential customers?

 

The importance of personalized switching assistance

A decade ago, $51 billion-asset Frost Bank in San Antonio had a switch kit consisting of a large binder filled with forms and a checklist of steps that gave customers something to take with them after opening a new account. 

Today, the community bank provides resources and assistance personalized to each individual and tailored to the two channels of account origination: in-branch and online. 

Frost Bank still refers to it as a “switch kit,” but it’s more of a process, says Brad Bremer, a senior vice president at the bank. 

When a customer is inside a branch, a banker walks them through the different steps of the transition. In some cases, the community banker might help with arrangements with the individual’s employer, or they might contact the government on behalf of the customer in the case of Social Security direct deposit. 

“That really helps them get that customer fully set up and confident before they walk out of the branch,” Bremer says.

Frost Bank is also using more technology in the switching process. For example, its vendor, Atomic, provides a direct deposit tool that helps customers set up or switch the destination of the direct deposit from their employer once they set up a new account online. 

The community bank also plans to move that switch feature forward in the process, so that it’s included as part of the digital account application. 

“The idea is to get the technology more embedded in the process and the experience, and we’re trying to do the same thing for some of the payment switches,” says Bremer.

However, even with an online account opening, a banker calls the new customer to talk through the steps of switching accounts. “The challenge of having something specifically called a ‘switch kit’ is that it really is something that has to be personalized to every single customer,” says Bremer. 

For example, employers have their own processes and payment cycles, and the switch for a direct deposit may be immediate, or it may take one or two payment cycles. That’s why interaction with a banker remains an important part of the process, he adds.

Third-party programs can help

Ultimately, the goal is to remove friction and make it as easy as possible to onboard a new customer. 

F&M Bank currently offers ClickSwitch by Q2, a portal that customers use to transfer accounts. The community bank also offers CardSwap, another Q2 product, which helps customers change payments connected to their old  debit card number.

F&M Bank has its staff do test switches, so they fully understand how the program works and can talk the customer through it clearly. 

“I’m a firm believer that if you’ve never used the product, you’re probably not going to be the best person that’s selling it, so we encourage testing and usage for staff,” says Marino. 

Building staying power

F&M Bank plans to change its switch kit to a white-label program with a more robust customer onboarding program. 

Its current switching program is offered at the end of a new account opening, when the customer receives an email for ClickSwitch with a code to activate it. The goal is to provide a switch kit link that is embedded in the account opening process. 

F&M Bank has found that offering switching resources helps its conversion rate. While switch kits aren’t necessarily what gets a new customer in the door, they can help make the decision to change banks easier. 

“When a potential customer comes in and asks about bank products,” Marino says, “the team member can say, ‘I know switching is hard, here’s how we can help with that.’”

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