BIRMINGHAM, Ala. — While many banks didn’t make it through the Great Recession intact, Regions Financial Corporation not only made it through the tumultuous period, it emerged on the other side stronger and more popular with its customers than ever. Here’s why.
According to a recent article in American Banker, much of Regions’ renewed success can be attributed to one concept: shared value.
Developed by Harvard Business School professor Michael Porter, shared value is the idea that all initiatives — whether products the company sells, nonprofits it supports or procurement practices — should create value in some way for customers, employees, shareholders and the community.
“If everything you do and every product you sell is really focused on bettering the community, that is the most powerful way to affect your reputation,” Porter said.
Regions CEO Grayson Hall is a devout believer in the idea, having incorporated the term into the bank’s mission statement and developing initiatives in the company to implement it. Now his company—and customers—are reaping the benefits.
Their profits have returned to pre-recession levels, stocks are strong, and the Birmingham-based institution was recently rated as having the best reputation among banks in a study by the Reputation Institute—moving up from #19 just two years ago.
“It’s really simple,” Hall said, “do the right thing every day, in every decision and with every customer interaction. Regions’ associates embrace the idea of staying focused on serving customers and making a positive difference in the communities where we work, play and live. And if we help our customers, associates and communities succeed, then our shareholders will benefit. This is our primary focus as we build a stronger, more sustainable business.”
American Banker acknowledges that the road to Regions’ new reputation hasn’t always been a smooth one for the copmany. Earlier this year the bank was fined $7.5 million for charging overdraft fees to customers who hadn’t opted in to overdraft protection. Regions self-reported the error and has reimbursed customers, in addition to paying the fine to the Consumer Financial Protection Bureau (CFPB).
“We’ll never get to the point where we make no mistakes,” said Hall. “But when we make them, we need to recognize them. We need to correct them and continue to build a deeper level of trust with our customers so that they know we are committed to doing the right thing.”
Regions has also focused on measuring and improving the satisfaction of their employees, earning the company a “Great Workplace Award” from Gallup.
“This is the way bankers want to interact with customers,” said Regions head of external affairs Rick Swagler. “They don’t want to be selling whatever product is hot that week; they want to figure out what customers want to accomplish and what products and services we have that can help them reach their objectives.”
Like this article? Hate it? Follow me and let me know how you feel on Twitter!
— Elizabeth BeShears (@LizEBeesh) January 21, 2015
Don’t miss out! Subscribe today to have Alabama’s leading headlines delivered to your inbox.