Pointing the way forward on PPP

When it comes to creating a positive customer experience, what could matter more than standing ready to help at the exact moment your customers need you the most?

Many banks found themselves rising to the occasion during the COVID-19 pandemic, when revenue-starved small business clients turned to their trusted banking partners to navigate the Paycheck Protection Program. Even as these businesses clamored to use PPP as a lifeline, they often found the paperwork to be confusing and lacked information about the status of their applications.

“We saw this as an opportunity to support our clients in their time of need,” says Siya Vansia, chief branding officer for Englewood Cliff, N.J.-based ConnectOne Bank. “PPP is rules-based, lengthy and complicated. Businesses need their bank to support them and guide them.”

Along with providing a positive PPP experience for their existing customers, many banks made moves to start new relationships with a considerable number of other businesses that felt abandoned by their existing banks.

“PPP was a unique event in terms of the opportunities it created,” says Vivian Merker, partner with New York–based Oliver Wyman Group. Since the PPP was rolled out very quickly with little warning, she says, those banks that used both technology and human contact to stay in touch with their customers enhanced the customer experience.

Paul Schaus, president and CEO of Phoenix-based CCG Catalyst Consulting Group, agrees. “For existing clients, this was an opportunity for customers to be able to say, ‘My bank was there for me in my time of need.’ And it was an opportunity for community banks to pursue new clients, particularly with those that had been customers of large, national banks that could not serve their needs in PPP.”

Going forward, as the post-funding phase continues, banks have a chance to show customers – both old and new alike – the kind of stellar customer experiences that’s available with their other products and services.

One bank that stayed particularly close to small business customers was Citizens Bank of Edmond in suburban Oklahoma City. The bank uses software that provided regular, automatic updates as loans were being processed, and it posted videos on social media explaining how the program worked. The bank augmented that information with a human touch by promoting constant communication with its customers – it even made public its top executives’ phone numbers, including that of president and CEO Jill Castilla.

“There was so much anxiety during this difficult time. We wanted to walk beside our customers and keep them abreast about what was happening, to provide transparency to the process and help them manage their expectations,” says Castilla.

During the first phase of the program, the bank served only its existing customers, and it later spread its reach to non-customers in their city and state during the second phase. Only in the last phases did the bank help businesses outside its core region. By early June, the bank had processed 450 PPP loans worth about $25 million, with roughly 60 percent of those loans to existing customers.

Citizens Bank has not aggressively pursued additional business with the new customers, but a number of existing customers were so impressed with the service they received during PPP that they opened additional accounts with the bank.

Vansia at ConnectOne says her institution also realized they could help non-customers when they found that many small businesses in its core market of New York and New Jersey were not getting the PPP assistance they needed. By proving that ConnectOne could assist those businesses, the bank was able to capitalize on the positive customer experiences and showcase additional services, especially on the deposit side.

“That opened the door for us to expand our relationship with the new customers,” Vansia says.

CCG’s Schaus believes there is a huge opportunity for community and regional banks to pursue additional relationships from PPP. “A lot of the larger banks at first said they could only help customers that had credit accounts. That left a lot of small businesses that had been customers of these banks on the deposit side without any assistance. That caused a lot of ill will.”

However, Schaus notes, community banks will have to be able to convince these new business customers that they have the digital and online services to compete with larger banks. That might require some upgrades.

Merker adds that a number of small businesses do not currently have any credit relationship with banks, and that the pandemic may have left them in need of additional credit and capital beyond what they got with their PPP loan. These customers also may need bank assistance with payroll and merchant card processing.

Banks that provided a strong customer experience with PPP now have the opportunity to show small business what a great customer experience they can provide with these other services as well.

 

Lauri Giesen has spent more than 25 years writing about banking technology and payments for numerous business and financial publications. In the 1990s, she founded and edited Financial Service Online, a magazine covering Internet-based forays into banking and investment services.