KQ Article

Have you ever tried to explain new banking regulations to your mother, your best friend or anyone who isn’t a banker? Take them through the details of Dodd-Frank? They don’t get it...why should they?

Research we conducted recently for our Collaborative confirmed that most consumers don’t see how regulations affect them or the banking products they use. When we asked consumers about a specific regulation, they told us whether or not it was a good idea, not how it changed their banking habits. Frankly, consumer opinion about regulations is split. Half of consumers see the regulations as restrictive, half as safeguards meant to help them.

Consumers are generally confused. Their perception is that financial institutions create new rules to penalize customers and limit access to their money. They don’t understand that these rules and constraints come from various sources. They have difficulty distinguishing between rules that are a result of government regulation from rules that are due to changes in your internal policies. They merely lump all rules together and view them as barriers to their funds.

Bankers, however, know exactly how regulations affect products. Interestingly, virtually all bankers view regulations as the source of more complicated processes, fee increases and more angry customers.

Here’s the problem: While most consumers in our study did not connect regulations to specific products, there was a definite correlation between how financial institutions respond to regulations and consumers’ perceptions of that bank’s or credit union’s brand.

In other words, if bankers react harshly to regulations, it hurts their brand identity. If negative opinions about regulations are voiced at employee meetings and training sessions, these messages find their way into conversations with customers and members — and they don’t like it.

Seeing regulations not as constraints, but as opportunities to protect and grow with customers, is a difficult but important shift we need to make in our mindset as bankers. How we train employees, how we implement internal policies and how we communicate these policies to customers will only become more important in an increasingly regulated industry.

The good news is this: We own the opportunity to shape how customers view our brand — and the Collaborative can help. For more about our research and other useful ideas, plan to attend a Deluxe Knowledge Expo this fall or connect with us at:

• Knowledge Expo 2011
• Collaborative Blog
• Deluxe on Facebook
• Deluxe on Twitter: #DlxCollab