ABA Banking Journal - April 2008 - (Page 26)
Community Banking under one organization, would dutifully make referrals to the insurance shop. Sometimes, nothing would happen. “Customers would get upset,” said Wilson, president and CEO of the bank. “They’d complain to the bankers that, ‘Your insurance agent never phoned me’.” Time and again, when a banker tracked down the matter, the insurance agent involved would respond, quite bluntly, along these lines: “I knew it was bad business, and I don’t have the time for that. I never called them back because I get paid for bringing in business.” With community banks’ stock in trade being high customer service, a retort like that essentially says, “Don’t bug me with junk.” The bankers began to be reluctant to send referrals to the agent, until a better understanding developed. But another panelist illustrated how the challenge of integrating two financial services cultures that long existed apart can be tricky in the other direction, as well. Tom Kiral, executive vice-president at S&T Bank, and president of S&T Insurance Group, LLC, said that a prime focus for his organization, as it moved into insurance, was the commercial side, convincing business customers of the bank to entertain the idea of obtaining insurance services from the same company. However, Kiral said that S&T found that commercial lenders often viewed their relationships with their borrowers as proprietary, and tended to keep them very close to the vest. “‘It’s my customer’,” said Kiral, describing the typical lender’s attitude, “‘and you’d better do a good enough job at it so you don’t tarnish the relationship’.” Turning this attitude into one of at least basic cooperation was a challenge, Kiral admitted, and meant getting pretty hardnosed with the insurance agents. “We charge the producers from the first sale to gain the confidence of the referring party,” said Kiral, and this internal “sale,” made in the course of handling the external, actual sale, is taken seriously. “If they [the producers] don’t do it,” he said, “I question whether they are doing the right thing for a living.” But Kiral added that it is important for bankers referring commercial accounts for possible insurance sales to understand that an agent truly has to see two things in a lead: potential and payoff. “We [agents] work on stuff we have a chance to write,” Kiral explained. “The submission process for a commercial policy is labor intensive and expensive.” Typical commercial policies are not cookie-cutter affairs, with much customizing and tailor-fitting involved. Kiral The Headache: Questions Customers Ask Today W hile large banks have communications staffs and “spin control” for some of the uncomfortable news coming out these days, community banks typically have their own banking staff fielding the questions caused by today’s rocky economy. We asked bankers what they were hearing and what they were answering. Below is what they passed on. If you have another question—and your answer—that you are getting from the public that you’d like to share, e-mail it to firstname.lastname@example.org, and we’ll consider it for the online edition of this column at www.passtheaspirinplus.com. To submit new “Pass the Aspirin” questions, or volunteer to be a prescriber, also send to email@example.com Pass the Aspirin lines do not apply to many of our applicants and are often transparent to those to whom they do apply. So what do we say to our customers? We say that we want to get to know their needs and circumstances well enough to not only answer what, if any, impact the current state of the economy has on their request, but, more importantly, to learn how Bank of Lancaster can help them meet their needs and achieve their goals. Remedy 2 Frank L. Carson, III, president and CEO, Mulvane State Bank, $77.5 million-assets, Mulvane, Kan. The question we’re hearing is: What effect is the subprime real estate issue having on your bank? Our answer is that we did not make those type of loans, so there is no direct effect on our bank. Remedy 1 Pamela J. Fawver, vice-president and branch manager, Bank of Lancaster, $325.5 million-assets, Kilmarnock, Va. The most frequent question on the minds of borrowers has less to do with specific economic indicators, but more to do with, “What do the economic headlines mean to ‘me’ if I want to borrow money?” Borrowers suspect that lending terms have changed, but do not know to what extent. Our bank has money to lend and the fundamental principles of qualifying for a loan request in our small community bank are much the same as they ever were. A lender must get to know the customer, the request, and financial strengths and weaknesses before a decision is made. Recent changes in our lending guide- Remedy 3 Blair Hillyer, president and CEO, First National Bank,$171.5 million-assets, Dennison, Ohio. The opening part of the question from customers is “You don’t have subprime mortgages, do you?” When the answer from the bank is “no,” the followup question is, “Are you being affected in any manner from them?” Our answer to that is “yes,” because home values are declining due to the glut of homes on the market. We also tell them that we are damaged by borrowers who can’t pay their instalment or consumer loan with us because an irresponsible mortgage lender put them into a house they couldn’t afford. Without the mortgage, our borrower would probably be paying on time. 26 APRIL 2008/ABA BANKING JOURNAL Subscribe at www.ababj.com
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