With the number of people experiencing food insecurity in the U.S. having increased
Now is the time for banks to step up and help their customers gain financial stability. This will increase opportunities to get repaid and establish a positive relationship with their customers. By building loyalty and trust, banks can also turn previously struggling families who may default into secure, long-term clients who will likely use the bank's other products and services.
Providing access to relief is something that many banks recently did. In fact, efforts taken during the pandemic demonstrated that banks and financial institutions can and should rise to the challenge of helping their customers address financial hardship. And now is the time to apply those lessons in a strategic and permanent manner, creating a financial services sector that actively supports customers in need, and in doing so, creates wins leading to broader impacts that go beyond the household in need — stronger portfolios, increased repayment rates and even measurable social impact, all of which benefit banks.
Whether it's a societal emergency, like a global pandemic, inflation or natural disaster, or a private crisis such as job loss or illness, emergencies will continue to happen. Helping people navigate unexpected emergencies and weather financial hardships can be a strategic play for banks that results in long-term, loyal customers, better business outcomes and a healthier society overall.
The good news is that help is out there. In fact, in the last few years, nonprofits and governments at the local, state and federal level have launched new financial resources to help families in crisis, including loans, financial planning or social support programs. Yet, while there are many new programs available, it can be difficult to locate the information or understand who to trust, especially when someone is in the midst of a crisis. This is a seminal opportunity for banks to emerge as a trusted source for local programs where customers can seek help.
F.N.B. Corp, the holding company for First National Bank, is making its second investment in the $13 million-asset Hill District Federal Credit Union.
People already look to their bank for financial information and resources. In a 2020 survey,
Waiving penalties and fees and providing direction to national and local assistance is one way that some banks and financial institutions have made a quick pivot to work with their customers during challenging times. Some might say this was a simple change, but the value and the message delivered was one of support and empathy and represents a massive shift in the way that banks are choosing to serve their customers. Now that institutions have shown a willingness to do so and have reaped the benefits, it's time to continue that approach and bolster it.
An empathy-first attitude that actively looks for ways to support customers in need will allow more people to return to financial stability, and build long-term positive relationships with their banks.
If we take in the lessons that the last few years provided us, we can show up for our customers every day, in good times and bad, and in doing so, demonstrate that banks can play a strategic role in helping customers see better financial health or at least point them in the right direction.
Providing relief should not be a priority of the past. It must remain a permanent solution — and part of any bank's strategy.
