Changing Small Business Lending Environment for Financial Institutions

Posted by on November 24th, 2015

lendingRecently, I attended the American Banker’s Small Business Banking conference in Nashville, TN. One of the many interesting sessions I attended discussed Alternative Finance Companies (AFC), and their growing influence and partnerships with small business banking lenders. The partnerships that are being forged with financial institutions will continue to change the lending landscape for small businesses seeking financing, as well as for those financial institutions looking to provide the necessary financing to their small business customers and prospects. The former Secretary of Treasury, Larry Summers, stated, “I would not be surprised if within ten years, alternative finance companies generate 75 percent of non-subsidized small business loans.” AFCs are changing the mindset of how small businesses consider who to seek for financing, and financial institutions are taking notice as well.

An AFC generates loans outside of the traditional banking system and typically involves advance technology and analytics to lend digitally. Most of the focus for AFCs has been on smaller loans for micro and small businesses. Most of these alternative lending firms are:

  • technologically savvy
  • highly adept with social media
  • have a non-bank culture
  • are more entrepreneurial
  • have excellent customer service
  • can make a loan decision quickly
  • have the backing from investors and other capital markets.

Alternative financing for small businesses is becoming more attractive in order to access capital quickly for opportunities that arise. AFCs provides a small business the means to gain funding quickly. A traditional financial institution, for example, may not be equipped to provide loans under $200,000, allowing the AFC to satisfy those quick needs for working capital. Also, some traditional financial institutions  tend to not focus on smaller or micro segments of the small business marketplace due to the cost to serve those companies and the potential risk involved. AFCs are filling those gaps by financing needs of those smaller tiers.

What’s interesting now is that some traditional financial institutions are beginning to take notice and are working to partner with AFCs to better serve their small business portfolios holistically. This type of partnership not only helps banks support their small business lending offerings, but also benefits the AFC by opening up the opportunity to tap into a loyal customer base. Instead of losing a small business customer to a competitor, financial institutions are now partnering with the competitor to become a full service lender to current and potential account holders. Financial institutions can leverage the technologically enhanced platforms that AFCs possess to provide lending alternatives more efficiently and with greater flexibilities, which helps lower their overall cost of origination. Many of the AFC platforms are now being integrated with the financial institution’s website to offer quick initiation and decisioning of financing requests, further squeezing the cost of serving the financing needs of the micro to small businesses.

The digitalization of financing, which allows tremendous cost and process efficiencies, continues to be on the forefront of financial institutions. In order to fully service the needs of the various tiers of small businesses, financial institutions may need to consider partnering with an AFC, or alternatively financial institutions will need to consider building a brand new platform in-house or modify current in-house platforms at a much greater cost, which makes the partnering angle more attractive. The digital age is not going to subside and small business owners will continue to work with those companies that provide the full service and quick response that’s needed to help successfully run their business. Traditional financial institutions will need to consider how best to continue to support the small business segment efficiently and effectively.

1. American Banker Small Business Banking Conference 11/17/2015 breakout session – “Building Bank and Alternative Finance Partnerships”
2. “How to Work with Banks: Advice to Alternative Finance Companies”


Growing Your Subscriber List

Posted by on November 19th, 2015

List BuildingIn the ever-growing digital world, marketers spend a significant amount of time developing strategies to drive traffic to their organization’s website with hopes to build their audience and increase brand loyalty. Those who visit an organization’s website on a regular basis to consume content are extremely important for growth. While websites will certainly receive new visitors from organic search, the main goal is to have them opt-in to receive future updates, therefore keeping your products and services top-of-mind and relevant.

But how do we get them there? Ultimately, it comes down to a few easy-to-implement strategies to help grow your subscriber list and enhance loyalty:

1. Use data and analytics

With a plethora of data platforms at our fingertips, incorporating metrics into your marketing strategies should be a no-brainer. Utilizing data analytics enables marketers to get a better picture of the types of content that are being consumed on a regular basis.

Furthermore, you also want to notice if certain call-to-actions work better than others. Do you need to switch up content placement or utilize different text? Does one situation cause visitors to click more than another?

Using these metrics can help you create a template layout for your landing pages that offer you the best chance at success. It’s very easy to develop and implement A/B testing to decide what works best. Once you’ve reached a conclusion, you can incorporate that same line of thinking in other locations.

2. Create a well-researched content strategy

Here’s another situation where data can help you. Using metrics, you can begin to understand the types of content that mean the most to your subscribers. Using this information, you can create white papers, infographics, blog posts, etc. that will resonate with your current readers.

It’s important to remember that it’s not necessarily about having something to say about everything. You will experience more success by using the numbers to develop a clear understanding of what is working instead of just shooting fish in a barrel and putting out random content.

3. Know what the competition is doing

Developing a strong content strategy is at the top of many marketers’ lists. Countless research studies have been conducted supporting the importance of providing targeted, informative and relevant content to your readers. So, you might be hard-pressed to find a topic that hasn’t been covered. It can be extremely difficult to come up with a brand new idea that no one has ever talked about, especially to gain some sort of competitive advantage, but the key is to offer something different and interesting even if the subject has been covered elsewhere. This is a good place to use internal research, like a benchmark report or a data purge, to gain insight into what your customers are doing.

4. Know your niche

It’s important to understand that people subscribe to your content because they like what you have to say. If you are working off a focused content strategy, you are creating content that lives in a specific niche. While it’s okay to do something different every once in awhile, especially for a vessel like a blog, make sure you don’t take it too far. You don’t want your subscribers to feel like you have no focus and your information holds no value.

5. Be a thought leader

As stated previously, it’s hard to constantly come up with refreshing content, but you don’t want to let too much time pass before providing readers with something new. You want the content you offer to leave readers satisfied, whether they turned to you for answers to specific questions or just wanted to consume something insightful and intriguing. Regardless, the content you created needs to provide a level of value and leave your readers wanting more.

Use all the tools you have in your arsenal to create the right pieces of content for your specific audience. By taking the time to really get to know who your readers are and what they want to learn, you are giving yourself the best opportunity to build your subscriber list and increase brand loyalty.


Marketing Trends for 2016

Posted by on November 17th, 2015

2016 TrendsIt’s beginning to look a lot like … that time of year when marketers discuss initiatives that worked, what could have been more effective, how marketing efforts impacted the organization and ways to improve for the new year. Many discussions will lead to 2016 marketing plans that comprise of the most effective initiatives from the current year along with new ideas and concepts. Here are three ongoing marketing trends that have made a big splash in 2015 and will continue to gain momentum throughout the new year.


Organizations are making a continuous effort to build brand awareness using digital channels to showcase user-generated content as well as turning some of their attention to building brand communities. Through forums, social media and email messages, organizations have given consumers a space to provide feedback, connect their ideas and compare product usage situations. Content has been a key ingredient in any marketing program for quite some time, and organizations are offering educational, relevant and engaging information through a variety of channels. Today’s consumers are informed, and the more information they can soak in, the better they will view the organization and its products and services.


Organizations strive to captivate their audience with innovative advertising. Implementing video into your marketing strategy can make a large impact on current and prospective customer engagement. Marketers have taken the traditional text-based ads one step further by using embedded videos in search results. With Google’s® acceptance of video-based advertisements in its search results, this new trend can soon become a norm.1


As organizations must ensure their sites are optimized for mobile devices in order to keep up with Google’s new search algorithm, mobile has never been more important. More and more people are using their smartphones for search, video and shopping among other things. This makes mobile elements, such as a responsive websites, embedded videos and other mobile capabilities an important part of any marketing strategy.

With the new year just around the corner, the time for updated marketing calendars, new budgeting spreadsheets and decisions for upcoming events has officially come. Marketers continue to search for innovative ways to entice, capture and retain customers. Utilizing content, video and optimizing mobile in your marketing strategy can help your organization keep up with current trends and stay ahead of the game.




Protect Your Customers and Your Brand With DMARC

Posted by on November 5th, 2015

email securityTrust is critical to digital marketing. Every time customers open your email or visit one of your web pages, they need to feel secure knowing that their personal information is not getting into the wrong hands. Unfortunately, there are cybercriminals who profit from stealing this information and using it fraudulently. One of their tactics is called phishing, which can have a serious negative impact on your organization and your customers. Luckily, there are methods, such as Domain-based Message Authentication Reporting and Conformance (DMARC) available to help combat phishing, and it’s relatively new and very promising.

What is phishing?

Phishing is a type of scam where a criminal uses digital media techniques to impersonate a reputable brand or person with the express purpose of stealing something from victims. For example, the attacker might send an email to a victim that appears to be from the victim’s bank telling them there is some issue with their account that needs to be resolved immediately. Social engineering techniques are used to create fear to make the victim believe they have been falsely accused of something or plays on their greed1. The emotional response that is created can cause even sophisticated “techies” to fall prey to these techniques. When the victim follows a link in the email and enters their account information into a fake web form, the attacker gains access to the victim’s account information and can drain their funds.

The impact of phishing on relationships

Data vendor, Return Path, recently published some scary facts about phishing:*

  • 97 percent of people globally can’t identify a sophisticated phishing email
  • Email fraud has up to a 45 percent conversion rate
  • 71 percent of U.S. adults would be at least somewhat likely to switch to a different bank if they became a victim of online fraud at their current bank
  • The average cost of an enterprise data breach is $3.79 million

* Return Path. (June 3, 2015). “13 Email Fraud Stats Every Security Professional Should Know.”

Cybercriminals are getting more advanced with their ability to mimic the look, feel and even domain names of their target brands. If your account holders are victimized, they will be angry, and it’s likely their anger will be directed at your financial institution, not the criminals. So what can be done?

The role of email authentication

The best way to stop phishing is to ensure that phishing emails never get delivered to the inbox. Internet Service Providers (ISPs) have sophisticated filtering techniques that cybercriminals try to get around by using a tactic called spoofing. Spoofing is the act of impersonating another organization’s domain name(s) in the delivery of email messages and/or in the links in those messages. Spoofing hijacks the trust relationship between an organization and its customers.

One tactic in the fight against spoofing and cybercrime is email authentication. Email authentication requires participation from both the sender and receiver to determine if a message is valid or not. In the type of email authentication called Sender Policy Framework (SPF), the sender publishes a range of IP addresses in its Domain Name System (DNS) that are authorized to send out email on its behalf. If the receiver sees messages purporting to be coming from that sender but from an invalid IP address, it has the option to block those messages.

Another type of email authentication is DomainKeys Identified Mail (DKIM), which is a cryptographic method where a public key in the sender’s DNS is resolved against a private key that the sending machine applies to the message. The receiver needs to resolve these keys in order for the DKIM signature to be valid. The receiver can then filter out messages if the DKIM is not valid.

These methods are very useful, and we suggest that all senders authenticate their emails with both SPF and DKIM. Harland Clarke Digital does this with all of its own domains as well as its clients’ custom mailing subdomains. But unfortunately, both protocols can be hacked, because they work in isolation from each other. To make matters worse, legitimate senders do not always use SPF and DKIM across all of their valid email channels. For example, your marketing emails might use DKIM, but your online banking messages do not. So, ISPs are still left in a position of not having an acceptable and reliable way to filter out bad mail and ensure good mail gets through.


DMARC is a newer authentication mechanism that leverages both SPF and DKIM. With DMARC, senders can:

  • Receive reports about messages that purport to come from their domains but fail SPF and DKIM checks.
  • Set a policy for how mailbox providers should treat these messages. The options are to deliver the message (but send a report), to quarantine the message or to outright reject the message.

One of the greatest benefits of the DMARC protocol is the reporting aspect. With that information at hand, senders can improve their message streams while also having an early warning system for spoofed messages. Because an outbreak of spoofing would likely not use valid DKIM and SPF, the spoofed messages show up in the reports. The organization can use this information to track down the spammers and hopefully get them shut down. The other advantage is that the sender can set a clear policy about what ISPs should do with messages that fail authentication.

How do you set up DMARC? What are the downsides to implementation? Are there any pitfalls organizations need to be aware of? We will cover in next month’s entry.




Social Media Becoming A Major Player With Financial Institutions

Posted by on October 29th, 2015

social conversationIn order to build relationships and increase conversions, businesses must be visible to their customers and, in many cases, this means a social media presence. While major brands have been working to build social communities since Facebook® first began, one-by-one financial institutions are  finding ways to create their own social media buzz. Take a look at any financial institution’s website, and you are likely to see some, if not all, of these social media buttons leading current and potential account holders to their social media sites.



Financial institutions are taking their marketing messages to where people, especially younger generations, are spending their time. Bank of America’s® Facebook page has over 2 million likes. Chase has 300,000 Twitter® followers. TD Bank has made big splashes using YouTube® with their “Sometime You Just Want to Say Thank You” campaign, which has over 22 million hits.

Sometimes, having a social media presence is not enough. It’s essential that the message is relevant. Financial institutions have found ways in the past year to not only provide bank information and videos with account holder comments, but also non-banking topics. For example, Bank of America has taken the need for relevancy a step further with its “The Business of Life” video talk show, which uses a wide range of panelists to discuss subjects that are important to the Millennial generation. “The Business of Life” is produced by Vice Media and jointly promoted through Pinterest.® Bank of America hopes the program will present economic news to all generations and incomes using a non-traditional form of media. As of this October 2015, “The Business of Life” has over 11 episodes with topics ranging from, “Why Pay Your Taxes” to “Why is College so Expensive.” Bank of America has seen 30 percent of its “Better Money Better Habits” website traffic come directly from Pinterest. According to Bank of America, “We’ve been successful on Pinterest, because we’ve listened to what the community wants to know, what people are searching for and customized our content to meet those needs.”1

Financial institutions need to think outside the box when looking for ways to be relevant in social media. Not only is important to utilize the right channel, but also promote the right message/content in order to drive business.


1. “Bank of America’s Millennial Marketing “Pays Off” with Pinterest.” August, 18, 2015.