Simple but Big Responses to "The Drive to Digital" and "Payments Disruption"

Many are documenting the key trends affecting community and regional banks.  The top two trends identified by Jim Marous in his excellent article, Top Ten Banking Trends for 2014, are 1. The Drive to Digital and 2. Payment Disruption.  Mary Wisnewski makes these points as well in the American Banker article, Takeaways from the American Banker 2014 Digital Summit.

Heady stuff, but some simple responses to the changing industry environment can yield big results for community and regional financial institutions without significant investment.  Research shows that three trends are driving both digital uses and payments disruptions:

•       Assuring no overdraft fees ever on transactions.  Prepaid cards and innovative platforms like BankSimple and GoBank offer this as a key feature and marketing pitch.  And it is getting tremendous response from consumers, as is documented with consumer frustration with existing bank services as released in the June 27, 2014 Pew Trust Study.  This strategy is winning transactions and profits from traditional bank accounts.  A “no-overdraft-fee-ever” checking can be easily marketed and delivered with existing systems and mobile banking tools to consumers.  Bankers just need to realize there is a segment that wants items paid rather than returned for their tradition services, and today research shows there is a growing segment of consumers who want all items returned and unpaid.  Banks and credit unions serve the first segment well, but most offer no service for the second.   

•       Offer a “companion” debit-only account for online and in-store shopping, or for providing a card to youth for spending.  Consumers can use this card for payment with greater security, but simply moving all funds out of this account when not shopping online or in-store.   It is how consumers use PayPal and prepaid cards as documented by consumer research, but it is easier using existing mobile banking tools to move the money with bank accounts.

•        Offer automated liquidity tools.  Banks can easily automate their lending functions today with apps or online and mobile delivery.  Many are offering automated lending tools today as illustrated articles in the American Banker.

 Of course, PaySound^® provides in one turn-key solution simply and quickly these very benefits for consumers, and 30% in revenue growth for your organization with no cannibalization of existing revenues!