Skip to main content

Credit Unions, Banks and Interest Rates on the Rise

By July 25, 2022 August 9th, 2022 CCG Financial Services Marketing Blog

Four financial marketing strategies to help overcome challenges and maximize opportunities in a rising rate environment.

Article Highlights

  • Use customer data to guide marketing campaigns featuring personalized, rate-relevant messaging.
  • Communicate and educate to help customers understand and manage the impact of rising rates.
  • Enhance customer service to build emotional connections that create loyalty beyond rates.
  • Provide a seamless user experience to differentiate your financial institution.

As the Federal Reserve pushes interest rates up at a rapid pace to combat inflation, a ripple effect has begun on other interest rates, including those for consumer deposit and lending accounts.

When interest rates rise on deposit accounts, you may attract more customers — but you’ll also face more competition from other financial institutions. On the flip side, rising loan rates can scare borrowers and slow down your lending opportunities. Meanwhile, today’s abundance of media channels makes it easier than ever for consumers to shop around for deposit and lending rates. And, with the decline in branches plus the increase in online and digital banking, maintaining personal connections is more challenging, adding another risk to customer loyalty.

Interest Rates on the Rise

So how do you beat the competition, ease borrower anxiety — and maintain profitable, long-term customer relationships? We have four tactics for you to try.

Leverage Customer Data to Guide Marketing Campaigns

Start with a customer-centric mindset that uses data analytics to better understand customer wants, needs, interests and demographics. Pay particular attention to how data points could relate to rising interest rates. Then build your financial marketing and engagement strategies around that knowledge to deliver targeted, highly relevant messaging to specific audience segments.

For example:

  • Identify customers who have adjustable-rate loans and target them with messaging that encourages refinancing to a fixed-rate loan; personalize by showing potential savings or payment information based on their balances.
  • Show how savings accountholders could improve their earnings over time by transferring funds to a money market account or CD at today’s higher rates; personalize by using the customer’s own savings account balance as a basis for the calculations.
  • Segment millennials — a group known to be savers — and target them with a marketing campaign that positions your deposit accounts (with new higher rates) as an attractive way to save for a car or house down-payment.
  • Look for patterns that may indicate customers who are likely to be lured away; send them messages showing how your products and services are highly relevant to their needs and better than the competition’s.

Communicate and Educate Consistently Through Multiple Channels

Many of your customers may not fully understand the implications of rising interest rates and the potential impact on their finances. They’re likely searching for information to help them navigate the changing and uncertain economic climate.

Take advantage of this opportunity to educate and reassure them by communicating regularly across the offline and online channels your customers prefer. You’ll keep your brand top of mind while positioning your organization as a trusted, go-to resource that helps customers make smart financial decisions.

Consider centering some of your content marketing efforts around deposit products, conveying the idea that rising rates can make your customers’ money work even harder — and you’re here to help that happen. But also help them learn about ways to manage their debt so it doesn’t spiral out of control as rates rise.

When developing value-added content like this, keep in mind common consumer goals and how different financial products can help achieve those objectives. Use these ideas as a guide to creating newsletter articles, emails, web pages, social media posts and other forms of online and offline content marketing — even direct mail.

Here are just a few examples of value-added personal finance topics you could cover:

  • Share a historical perspective showing that rates are still relatively low compared to other decades, so customers feel more comfortable with the idea of taking out a home, auto or personal loan, or home equity line of credit.
  • Educate customers on ways to pay off variable rate debt before rates get higher, including how debt consolidation, cash-out refis or home equity loans could help.
  • Explain how refinancing an ARM to a fixed-rate mortgage could be beneficial as rates rise and share factors to help customers decide if it makes sense for them. Consider sending personalized letters using the customer’s own mortgage information to show the potential impact of a refi.
  • Inform customers about different savings vehicles and help them understand which types are best for different needs and situations.

In addition, you could encourage engagement by allowing customers to sign up for rate-alert emails; running rate updates on your website home page and in your mobile app; and posting rate-related tips and facts on your social channels. And, of course, you’ll want to continue with more promotional marketing material — especially if your rates are better than the competition’s.

Enhance Customer Service to Build Loyalty

When rates rise, consumers are more likely to shop around. If rates are the only reason customers choose you, you could be in trouble. Bolster your defenses by creating excellent customer experiences — so customers feel they have a strong emotional connection to your bank or credit union. This can weigh heavily in your favor when it comes to keeping customers loyal if your rates are almost but not quite as low as the competition.

Customer service can also be a way to win brownie points with customers tempted by online-only banks, which have traditionally won on convenience and cost, but often fall short in the experience department.

To begin, gather as much information as you can on current customer experience challenges. Ask your front-line associates and call center teams for input, and consider surveying your customers. Once you understand the primary customer pain points, work on fixing those issues.

It’s also wise to adopt an enterprise-wide education effort so that everyone — from sales to service to marketing — understands the rate situation and how your products and services can help customers. Make sure the team knows how to answer common questions on rates, as well as deposit and lending products.

Teach them to use an educational, benefits-focused approach that clearly shows customers “what’s in it for me” if they try a new product or service. And ensure everyone is delivering consistent information across the organization and channels.

Provide a Seamless User Experience

Similar to customer service, user experience can differentiate your financial institution above and beyond interest rates. Consumers today expect frictionless interactions across every banking channel and may seek them out as a reason to stay with their current provider — or try a new one. In a rising rate environment, when consumers may be more anxious about their finances, convenience and control are more important than ever. Make sure your in-person, telephone, online and mobile banking experiences are efficient, smooth and very user-friendly.

Also work to make all your channels well integrated. So if, for instance, a customer uses your mobile app to move money from their savings account to a new money market account, that action is quickly reflected through online banking. Or if they start a mortgage refinance by phone, they can track its status online or through your app.

Winning the Competition for Bank Deposits in a Rising Rate Environment

Rising interest rates may bring challenges, but they also provide new opportunities for customer engagement, retention and, ultimately, higher profits for your financial institution. By trying the strategies above, you’ll be well positioned to enjoy those rewards in any rate environment.

If you need a plan for engaging customers in today’s rising interest rate environment, CCG’s financial marketing experts have the knowledge and skills to help you create customer-centric solutions to grow your customer relationships and boost your bottom line. Our complete suite of financial marketing solutions includes marketing strategy, content, digital/email and data analytics. Call us at 303.986.3000 or click below for a no-strings consultation to see what we can do for you.

Sushil Wenholz

Author Sushil Wenholz

Sushil is not only CCG’s creative director, but also one of our long-time writers. She specializes in developing engaging, value-added content that delivers useful, educational information to her client’s customers. As a multi-channel writer, she is equally adept at long-form articles, mid-length blogs, social media, video scripting and direct mail. As creative director, she helps ensure that the team delivers high-quality products that are on brand, and that meet or exceed client expectations.

More posts by Sushil Wenholz

Leave a Reply