By: Mike Horrocks
I was raised in an underbanked home!
I have known this for a long time, but it feels great to say it and be proud of it. I was raised in Neola, Utah, a small cattle ranching community of at the time 500 or so people. I don’t recall as a kid ever feeling poor or on the edge financially, in fact it was quite the opposite. When I was a freshman in college I got my own banking accounts and my first major credit card that gave cash back, it all just seemed normal.
I recall showing my dad my new found financial life. The concept of getting cash back for purchases was something he wanted in on. He made the call to get his own card and within minutes the representative on the other end of the call asked if I was willing to co-sign for my dad because he did not have a thick enough credit file. At this point of my dad’s life, he had developed and sold a couple of businesses, bought and managed a successful angus cattle ranch – but he had done most of it in cash and so he was “off the grid”. When I co – signed for my dad, it hit me, in terms of the banking system that I was studying at the university, we were an underbanked family!
So what are the lessons learned here for a banker today:
- Underbanked does not equal poor. I never felt poor, the family business was going great, and my dad was always able to meet any obligation or need for the ranch and us kids.
- Bankers need to know their customers. When my dad did need access to more capital, there was a great banker at Zions Bank that knew my dad and stood by him even though the traditional file was thin. So know your customers by all means (traditional credit, alternative data, etc.)
- Don’t forget the family. By this I mean the associated products and what they can mean to the overall customer picture and relationship. Know what risks and opportunities are there as you try to optimize the relationship.
If you want to read some more, American Banker just published a great set of articles on including consumers and how to retain them – it is worth a quick review.
Don’t let great customers like my dad go through your business development net. Attract them, nurture them and build great relationships with them.
