Service charges on deposits are down for the industry as the WSJ reports in Bank’s
Fee Bonanza Dries Up. The article points out regulatory changes spawned the change in revenue growth. Many may curse the darkness of regulation, but savvy bankers will light the candle of product strategy. Revenues are not down because of regulatory changes, but because of the lack of successful response by bankers. So how do
banks grow customer and fees?
The key is understanding what fees consumers willingly
pay. Revenues and accounts will grow
where customers see value. For example,
while bank fee revenues on transaction accounts are down 20%, PayPal grew
revenues every year in the last five by over 20% and now over 60% of U.S.
households have a PayPal account. Yet,
PayPal cannot offer transaction services that do not settle to a bank checking
account and credit card. What they do
offer is simplicity for in-store and online shopping, greater security and
simple, online transaction liquidity with BillMeLater (now PayPal credit).
If your checking accounts offered a similar service package you would
see revenue and account growth like PayPal has, as our PaySound®
clients can attest. It is time to
realize revenue and account growth is not limited by regulatory issues, but
marketing and product strategy, and turn-key solutions are available to you.
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