Tuesday, July 19, 2011

Borders Closing and Banking: What's the connection?

As many people have heard by now, Borders, a 40 year old retailer of books and music, is closing it's remaining 399 after a last minute attempt to sell itself. It's demise is blamed, in part, on management's strategy to continue building Superstores as people started shopping for books and music online.

So what's this have to do with banking? Borders made the fatal mistake of sticking with it's strategy to expand through physical locations while ignoring the behavior of it's current (and future) customers. They ended up too late to the marketplace and were saddled with large retail locations and no customers.

Over the last couple of years, I've participated in a number of industry events, as either a speaker or panelist, on numerous topics including social media and mobile banking. I find it increasingly apparent that many of the community bankers I talk to are still in the "Borders" mode. While they see traffic declining at the branches, they are unsure if they should get involved in social media or provide a mobile banking solution. They are ignoring the societal trends and taking a "wait and see" attitude. Given the speed at which consumers adopt new technology (how many people even heard of Twitter in 2009?), bankers today won't survive with that attitude.

So here's a message to all my fellow community bankers: I encourage you to take some risks, try new things and stay relevant so you don't become the "Borders" of the banking industry. Your community and, most importantly, your customers, need you.