Bank Marketing News

Looking? FMS wants to add to Sales Staff

2013-05-03T19:37:06Z

May 2, 2013, Chapel Hill, NC: Interested in work-at-home employment? Bob Singer of Financial Marketing Systems, Inc. would like to visit with you.

FMS intends to add sales personnel. Contact Bob Singer [bobsinger@bankmktg.com] at 815-398-2474 for more information.

From the FMS website:

FMS management team offers you over 50 combined years of banking experience. We understand the banking business and how to convert marketing expenditures directly to bottom line profits.

Because of our extensive involvement consulting with institutions around the country, as well as our front-line experience, we are able to offer up-to-the-minute marketing solutions. This means that we can help you achieve your goals faster and more efficiently. Our marketing systems and experience deliver results.

Robert M. Singer and Creston B. Harris co-founded Financial Marketing Systems, Inc. in March 1995. FMS client lists include institutions both large and small in virtually every region of the country. Mark P. Rodrigues began consulting with FMS clients in 2000.

CHRISTINE A. HARRIS, President

Joining FMS in 1997, Chris has served as Product Manager for all serialized programs including Deposit Power, Matrix Mail and Auto Loan Recapture, as well as all fulfillment and digital printing projects. Chris was named President of FMS in August 2010.

Before coming to FMS, Chris served as Debit Card Program Manager for Electronic Funds Transfer Illinois, and Program Manager for the Rockford, IL Chamber of Commerce.

ROBERT M. SINGER, Chief Executive Officer
Bob developed the unique marketing systems and strategies for FMS, making FMS a leader in custom database solutions for the financial services industry.

Bob's 24 years with a Midwestern savings bank included responsibility for many successful products and services through the bank's retail branching network. As SVP and Retail Banking Division Manager, Bob managed the marketing department, and was President of the Bank's First Service Corporation, a wholly owned subsidiary, which was created to market non-traditional investment products such as mutual funds and annuities. Bob also served as the President for the bank's in-house advertising agency and served on the Asset Liability and Long-Range Planning committees.

Bob is well-known in the industry as an informative and interesting presenter at various trade shows and annual meetings. He has served the Financial Institutions Marketing Association (FIMA) as Vice Chairman.

MARK P. RODRIGUES, Senior Consultant and Analyst
Mark designed the Matrix Mail program, as well as CRM systems used in wealth management groups in such organizations as Bank America, AMCORE and Standard Federal Bank.

He leads FMS' research services, as well as custom database marketing services and the Matrix Mail marketing system. Mark is considered by many to be the leading practitioner of systematic, serialized direct marketing.

In his more than 15 years of front-line experience, he has served in the chief marketing role of several $1 Billion+ institutions, earning recognition and awards for writing, creative and strategic planning. His responsibilities have included supervision of various product lines, including leasing, investment products, mortgages, as well as business development.

Mark created and edits Bank Marketing News, is an engaging and popular speaker, and author of numerous articles on consumer psychology and direct marketing.

CRESTON B. HARRIS, Co-founder, CFO
Creston developed the technical capabilities for FMS' one-to-one marketing systems. His background includes 19 years with a major thrift institution in
Northern Illinois. As SVP and Administration Division Manager, Creston was responsible for diverse functions including human resources, data processing, insurance, facilities management, training, technology Branch operations, sales management, consumer lending and deposit services.

Marketing Budgets of the Top 100 Credit Unions

2013-03-26T14:08:24Z

March 18, 2013: A recent study from The Financial Brand offered the following summary statistics regarding the marketing budgets of the top 100 credit unions:

Average Asset Size: $3.9 billion
Median Asset Size: $2.6 billion
#1 by Assets: Navy Federal ($48.0 billion)
#100 by Assets: Connecticut State Employees ($1.6 billion)

Average Membership: 284,985
Median Membership: 200,426
#1 by Members: Navy Federal (3.9 million members, $48.0 billion assets)
#100 by Members: Melrose (24,285 members, $1.7 billion assets)

Average Marketing Budget: $3.9 million
Median Marketing Budget: $2.6 million
Average % of Assets Allocated to Marketing: 0.10%
Median % of Assets Allocated to Marketing: 0.10%

Per Member

Average Marketing Dollars Allocated Per Member: $13.81
Median Marketing Dollars Allocated Per Member: $13.00
Most Marketing Dollars Allocated Per Member: Melrose ($203)
Least Marketing Dollars Allocated Per Member: State Farm (5¢)
Average Member Growth: 5.16%
Median Member Growth: 4.81%
Average Marketing Investment Per Net New Member: $281.48
Median Marketing Investment Per Net New Member: $223.00

Per Branch

Average Marketing Investment Per Branch: $190,954
Median Marketing Investment Per Branch: $102,278
Most Marketing Dollars Allocated Per Branch: Melrose ($4.9 million, 1 branch)
Least Marketing Dollars Allocated Per Branch: State Farm ($283, 24 branches)

The Financial Brand estimates that the top 100 credit unions spend a combined $400 million on advertising and related educational expenses; the marketing budgets of all 7,000+ credit unions combined may total $1 billion. Bank of American alone spends $2 billion on marketing every year.

The report from The Financial Brand finds a direct correlation between membership growth and the average marketing dollars allocated per member, as indicated in the table below:

Mktg. Spend Per Net New Member	Mktg. $ Per Member	Member Growth	% of Assets Allocated to Mktg.	Mktg. $ Per Branch	Asset Growth	Loan Growth
Over 10% Member Growth	$16.78	14.85%	0.12%	$144,564	12.67%	8.16%
Member Growth Between 5% and 10%	$14.94	6.52%	0.11%	$153,66	8.52%	3.21%
Member Growth Between 0% and 5%	$12.09	2.97%	0.09%	$107,488	6.20%	1.99%
Negative Member Growth	$9.59	-3.90%	0.07%	$71,863	6.56%	-0.36%

As this table indicated, those large credit unions that spent the least on average for marketing tended to lose membership. Among the most aggressive credit unions, the average marketing cost per net new member was substantially higher than average: over $1,000 vs. $281.

Source: The Financial Brand, which based the study upon NCUA 5300 call reports. http://thefinancialbrand.com/28271/credit-union-marketing-budgets-top-100/

Indirect Lenders beware! New Rules Make You Police The Dealer

2013-03-24T16:56:43Z

March 24, 2013: The Consumer Financial Protection Bureau ( CFPB ) has issued new rules that intend to end any practice of discriminatory pricing on auto loans lenders, making indirect lenders responsible even if they didn't strike the deal.

Based upon studies of auto loans, the CFPB contends that auto loans mark-ups, which are undisclosed to the buyer, can add cost borrowers hundreds of dollars and more. Minority borrowers tend to those who end up paying two or three times as much as a typical white borrower.

Auto dealerships provide financing for about 70% of auto purchases. Congress has restricted the CFPB from making policy directed at car dealers. The new ruling, however, makes the lender, not the dealership responsible for discriminatory lending. And the CFPB is allowed to regulate the lending practices of banks, credit unions and other lenders.

Financing is often where the dealership makes their profit. This allows the dealership to give a “win” to the buyer in price negotiation while concentrating on selling “the best deal available” for financing. The rate the dealership then offers is often marked up from the rate the consumer could typically receive if they shopped on their own.

According to a 2011 study by the Center for Responsible Lending, a non-profit advocacy group, these loan mark-ups cost auto buyers about $26 billion.

Another study by the National Consumer Law Center, which filed a series of class-action suits against auto lenders in the 1990s, showed actual mark-ups ranging from a few hundred dollars to more than $1,200. And that the cost per transaction varies dramatically by dealership, state and ethnicity.

The borrowers who paid the most were borrowers of color, said John Van Alst, an NCLC attorney. For instance, a white borrower in Texas paid a mark-up of $860. A black borrower with the same credit at the same dealership paid $1,272. Van Alst can't say whether the high prices were the result of discrimination or just that the dealer sized up the borrower and thought they'd be willing to pay more. Still, the results were the same -- while most borrowers paid a mark-up, the mark-up paid by people of color was sometimes three times more.

Regulation from the CFPB cannot eliminate dealership mark-ups, yet the new regulation holds the indirect lender responsible if discriminatory lending at dealership occurs.

The Best (and worst!) States for Consumers to Bank

2013-03-05T18:49:10Z

Foster City, Calif. (PRWE/March 4, 2013: A new analysis from MoneyRates.com finds that consumers in Ohio experienced enjoyed the best banking conditions in the nation during 2012; those in Illinois suffered more than those in all other states.

Illinois earned its worst-state ranking by posting the seventh-highest rate of bank failures and the tenth-worst customer-satisfaction score in the nation. South Carolina and Oklahoma were the second and third worst states for banking, with both posting below-average scores for bank failures and customer satisfaction.

MoneyRates.com's best and worst states for banking was based on bank-failure data from the FDIC, plus the bank customer-satisfaction rankings from Toluna coupled with the results of MoneyRates.com’s America’s Best Rates surveys. In the case of ties, the number of banks in the state, which indicates the number of choices available to that state’s consumers, is used as a tiebreaker.

Ohio’s customer-satisfaction score was the fifth-best in the nation, yet they reached the top rank due to no closures among the State’s 232 FDIC-insured institutions operating in the state. The state also earned points as the home of Nationwide Bank, one of the top banks for money market account rates in MoneyRates.com’s latest America’s Best Rates Survey.

Kentucky placed second in the survey, posting zero bank failures in 2012 plus the country’s sixth-highest customer-satisfaction marks. Similarly, Louisiana garnered third place with no failures and very high satisfaction ratings from the state’s bank customers.

The survey results show banking conditions are far worse in some states than others. In 2012, 43 of the 51 bank failures were concentrated in just nine states. But for consumers in states that fared poorly in this survey, finding a better bank isn’t necessarily a matter of moving, according to Richard Barrington, senior financial analyst for MoneyRates.com.

“For people who live in some of the weaker states for banking, the answer may be to look at regional or national banks based in other states that make products available in your area,” Barrington stated.

Recent rate and fee surveys from MoneyRates.com indicate that online banks generally offer lower fees and higher interest rates than brick-and-mortar banks. Because online banks are usually accessible to consumers in all states, they may also offer an option for customers who have struggled to find a suitable bank in their area.

Barrington said that customers who have found declining customer service at their local branch may also want to watch their bank’s financial health.

“While customers often cannot see a bank failure coming, what they can judge is customer service,” Barrington observed. “Sometimes, this can go hand-in-hand with the financial health of a bank – drastic cost cutting at a distressed bank can lead to poor customer service, and poor service can also cause a bank to lose business. In any case, banking is a very competitive business, with lots of options for customers, so there is no need to put up with sub-par service from your bank.”

For the full details on the survey, please see MoneyRates.com’s best and worst states for banking.

The 10 best states for banking

Based on the criteria described above, here are the 10 best states for banking:

Ohio. Ohio residents gave their banks the fifth-highest average score for customer satisfaction. In addition, there were no failures of Ohio-based banks in 2012, so Ohio also scored well for stability. As a bonus, Nationwide Bank, which made the top 10 for money market rates in the most recent MoneyRates.com America's Best Rates survey, is based in the state.
Kentucky. Kentucky's average satisfaction score ranked just behind Ohio's, and it also had no bank failures in 2012.
Louisiana. Louisiana finished with the same overall score as Kentucky, with their rankings being decided by the tie-breaker based on the number of banks based in the state.
Montana. Montana scored very high on customer satisfaction, and it also experienced no bank failures. But with relatively few banks based in the state, the latter did not weigh as heavily in the final score.
West Virginia. A very similar story to Montana, with high customer satisfaction and no bank failures, albeit with a relatively small banking community.
New York. Banks in New York received an above-average score in satisfaction, and the state saw no bank failures in 2012 out of the 175 institutions based there. New York is also home to more than 250 offices of Capital One Bank, which made the top 10 for savings account rates in the latest America's Best Rates Survey.
Virginia. In addition to scoring well for customer satisfaction and having no failures in 2012, Virginia is also home to two of the top banks in the America's Best Rates Survey: Capital One and Acacia Federal Savings Bank.
North Dakota. North Dakota finished in a virtual tie with Virginia, with Virginia winning the tie-breaker due to its larger banking community.
Colorado. In addition to having no bank failures in 2012 and earning an above-average score for customer satisfaction, Colorado is home to Mile High Banks, a regular on the America's Best Rates top-10 lists.
Texas. Texas scored slightly below-average on the satisfaction survey, but gets top marks for stability because it had no failures in 2012, despite being home to more than 500 banks. Texas residents also benefit from having access to branches of Capital One, whose rates often place it in the America's Best Rates top 10.

The 10 worst states for banking

Illinois. Illinois had the 10th-worst score for customer satisfaction, and the state was home to eight bank failures in 2012.
South Carolina. This state had a below-average rating for customer satisfaction and was home to two bank failures in 2012. That may not sound like many, but South Carolina does not have a particularly large banking community.
Oklahoma. Oklahoma edged out South Carolina only by virtue of the tie-breaker.
Minnesota. Besides scoring poorly in the customer satisfaction survey, Minnesota was home to four bank failures in 2012.
Georgia. Georgia led the nation in bank failures in 2012, with 10.
Rhode Island. Rhode Island had one of the lowest scores for customer satisfaction.
North Carolina. With a below-average score for customer satisfaction and the failure of one of its banks in 2012, North Carolina only beat out Rhode Island by virtue of the tie-breaker.
New Hampshire. New Hampshire's small banking community saw no failures in 2012, but earned one of the worst scores for customer satisfaction.
Hawaii. Hawaii has a very small banking community, and it scored poorly for customer satisfaction.
Indiana. Indiana suffered a bank failure in 2012, and also had a below-average score for customer satisfaction.

Source: PRWeb

Pew Survey: Payday Loans are Affordable; Paying Them Off Is Not

2013-02-21T19:38:19Z

WASHINGTON, February 20, 2013 /PRNewswire-USNewswire/ -- A new report from The Pew Charitable Trusts, Payday Lending in America: How Borrowers Choose and Repay Payday Loans, sheds light on the decision 12 million Americans make every year to use a payday loan.

Pew's survey results reveal that people choose these loans in an attempt to avoid long-term debt, or situations that involve borrowing from family or friends, overdraft fees, and cutting back further on expenses. But the average loan requires a repayment of more than $400 in two weeks, the typical duration, when the average borrower can only afford $50.

When borrowers have trouble paying off the loan, they return to the very same choices they initially tried to avoid.

"Payday loans are marketed as an appealing short-term option, but that does not reflect reality. Paying them off in just two weeks is unaffordable for most borrowers, who become indebted long-term," said Nick Bourke, Pew's expert on small-dollar loans. "The loans initially provide relief, but they become a hardship. By a three-to-one margin, borrowers want more regulation of these products."

Previous Pew research shows the average payday loan is $375. Americans spend $7.4 billion per year on the loans, including an average of $520 in interest per borrower who ends up indebted for five months of the year.

Key Findings:

· 58% of payday loan borrowers have trouble meeting monthly expenses at least half the time. These borrowers are dealing with persistent cash shortfalls rather than temporary emergencies.

· Just 14% of borrowers say they can afford to repay an average payday loan out of their monthly budgets.

· 78% of borrowers rely on information from lenders—who sell these loans as a safe, two-week product—when choosing to borrow money. This reliance reinforces the perception that payday loans are unlike other forms of credit because they will not create ongoing debt. Yet the stated price tag for a two-week, $375 loan bears little resemblance to the actual $520 cost over the five months of debt that the average user experiences.

· While payday loans are often presented as an alternative to overdraft fees on a checking account, a majority of borrowers end up paying fees for both.

· Some borrowers ultimately turn to the same options they could have used instead of payday loans to finally pay off the loans. Forty-one% need an outside cash infusion to eliminate payday loan debt– including getting help from friends or family, selling or pawning personal possessions, taking out another type of loan, or using a tax refund.

· By almost a three-to-one margin, borrowers favor more regulation of payday loans. A majority of borrowers say the loans both take advantage of them and that they provide relief. Despite feeling conflicted about their experiences, borrowers want to change how payday loans work.

Payday Lending in America: How Borrowers Choose and Repay Payday Loans is the second in a series of reports that will provide research for policymakers as they consider the best ways to ensure a safe and transparent marketplace for small-dollar loans.

Methodology: Pew's survey of payday loan borrowers is a nationally representative telephone poll conducted in two parts. Demographic data is derived from 33,576 responses (margin of error +/- 0.2%). The information about borrowers' experiences with payday loans is based on 703 interviews representative of payday loan borrowers (margin of error +/- 4.2%). Borrower quotations in this report come from a series of 10 focus groups.

Pew's safe small-dollar loans research project focuses on small-dollar credit products such as payday and automobile title loans, as well as emerging alternatives. The project works to find safe and transparent solutions to meet consumers' immediate financial needs.

www.pewtrusts.org/small-loans

SOURCE: The Pew Charitable Trusts

Mobile Banking Apps Fail to Meet Customer Expectations

2013-02-12T00:47:35Z

SEATTLE—February 5, 2013—A national survey of consumers using mobile banking applications revealed a surprising gap between what consumers want in a mobile banking app and what they actually get from their banking institution. The study was commissioned by Varolii Corporation, a customer interaction management application and services firm.

Americans increasingly want, and expect, to be able to conduct more advanced functions like depositing checks and receiving real-time notifications on account activity from their mobile banking apps.

“There’s an app for everything in today’s mobile-driven consumer environment. And, as the economy has suffered over the past few years, consumers are turning to apps for financial management as well,” said Brian Moore, financial services market manager for Varolii. “However, our study shows that most banks are failing to deliver on consumer expectations with first or second generation mobile applications."

Nearly two in three consumers believe it's their bank's responsibility to immediately alert them when they have a low balance or insufficient funds to pay a bill. According to the survey, nearly 70% of consumers believe that a banking application could have helped them avoid a financial problem in the past such as a costly and embarrassing overdraft or bounced check.

Yet, 68% of the respondents have never been notified of a low balance or reminder to pay a bill. And, the younger consumers are, the more strongly they believe in the importance of banks being proactive – 73% of 18-to-24-year-olds believe they should receive notifications from their banks versus 56% of those over 55 years old.

The survey also identified other key capabilities that consumers want for a superior customer experience such as notification of irregular account activity or notice of a low balance.

“The modern digital consumer clearly sees value in banking apps. Banking institutions have an opportunity to create third generation mobile applications that can enable a more proactive role in their customers’ finances…through their applications with personalized, real-time notifications of events that are about to impact their accounts," said Moore.

Not only do consumers want to be contacted but many want to be reached on a combination of digital channels. According to the research, consumers want to receive these notifications and reminders by email (47%), text message (22%) and through their smartphone application (13%).

“Mobile banking applications are on the rise and an ever-growing base of young consumers are using them and expecting more advanced capabilities,” said David McCann, CEO at Varolii. “Today, institutions need to upgrade to the next level by embedding more proactive, rules-based outreach into their application code. It is also important to realize that smartphone apps are just one more channel that has to be orchestrated into a holistic customer experience across voice, text, email and mobile devices.”

About the Survey
The "Can you Bank on your Banking App?" study of mobile banking applications was conducted by Wakefield Research, an independent market research firm, on behalf of Varolii, in December 2012. The 627 respondents included American smartphone and tablet users over the age of 18.

Source: Edelman PR for Varolii

TD Bank: Good Customer Service Allows Consumers to Feel Financial Confidence

2013-02-08T17:15:05Z

CHERRY HILL, N.J./February 7, 2013 / According to a survey released today by TD Bank, 60% of consumers who are happy with their bank reveal they have low or no financial stress and more than half are optimistic in their financial future. Moreover, consumers who define themselves as happy with their bank spend more than one hour less (7.3 hours vs. 8.5 hours) each week worrying about finances compared to those who are less happy with their bank.

“All banks are not the same when it comes to the service they provide. Research shows those who feel valued by their bank are more likely to be happy with their financial state,” said Ryan Bailey, Executive Vice President, Head of Deposit Products, TD Bank. “TD’s legendary service with live representatives available 24/7, extended store hours, free coin counting and award winning checking products are ways we work to make our customers happy.”

TD Bank’s surveyed more than 1,500 consumers from Maine to Florida to better understand consumers' banking experiences, their financial stress as well as their financial outlook.

Based on the survey, Bailey concludes that “fast and simple” customer service is the rule to follow to help influence customer satisfaction. The key components of “fast and simple,” those elements cited as leading a customer to feel valued by their bank, include friendly service (82%), knowledgeable advice (62%) and being a reliable financial resource (60%).

“It's important to establish a positive connection with a banking partner you trust because being happy with your bank can serve as a solid foundation to build a more confident and secure financial future.” adds Bailey. “So if you're not in love with your current bank, see what’s out there, and find a bank that offers you the service and convenience you deserve.”

Other Key Findings From The Survey Include:

Top financial goals among those polled included saving (56%) followed by paying off debt (38%) and planning for retirement (36%).

Among those aged 35-54, saving and investing more (63%) and planning for retirement (49%) were top priorities.

60% of respondents in a happy banking relationship reporting they have low or no stress compared to 47% of others who carry high or overwhelming stress about their finances.

Three-out-of-four respondents aged 18-34 noted friendly service as a key characteristic to an ideal banking relationship compared to 82% of ages 35-54 and 89% of those 55+

When examining the nature of banking interactions, the majority of consumers are using bank branches (73%) followed by phone (30%) and online (13%)

Not surprisingly, those 18-34 are most likely to go online, however 65% still use bank branches

Survey Methodology
The study was conducted from January 23-28, 2013. The sample size of 1,520 has a margin of error of +/- 2.5%. The survey was hosted by global research company Angus Reid Public Opinion.

SOURCE: TD Bank

Transparency: How to Achieve It and What Not to Do

2013-02-08T17:10:00Z

The previous article in Bank Marketing News offered a summary of an important survey that offered insights into how to make consumers comfortable paying fees. One of the key findings of the survey was that transparency is the main contributing factor regarding helping a consumer feel comfort with fees.

Yesterday, I received my bank statement and found the attached fee schedule. Never had I seen such a plain and simple fee schedule. No logo. No disclosure. It came exactly as you see it. So plain, it was hard for me to miss.

Then I noticed that paper statements will be accompanied by a $5 fee beginning in March.

Interviewing my contact at the Bank, I was told that this was the only notice that will be sent out regarding the change. Free business checking no longer includes paper statements. I got the impression that they are aware that some people aren’t going to read the notice they sent, will be charged a fee and then respond with a complaint and feelings of great dissatisfaction.

So, my Bank has supplied a real example of non-transparent communication. Which raises the question, just what does transparency look like when done well by a bank?

Most marketers will tell you that transparency is a subjective construct for the consumer. They know it when they see it—and transparency will vary from consumer to consumer. Yes, it is very difficult to hit a target that someone else is moving.

So make your own target. To be perceived as being transparent, tell your customer “We want you to be fully aware.” Or, “We need to make a change, and don’t want to you to be surprised.”

Another method that contributes to a consumer’s perception of transparency involves offering choices, a la carte menus, and frequent reminders that the bank is transparent. Yes, your job as a marketer is to tell your customers how they should be thinking about your bank.

Yes, I did finally sign-up for electronic statements. Glad I didn’t miss the announcement.

Surprise: Deloitte finds that Customers will pay fees

2013-02-07T18:22:10Z

NEW YORK, February 7, 2013: A new Deloitte Center for Financial Services survey released today finds that a surprising 48% plurality of bank customers prefer per transaction fees over monthly flat fees.

The a la carte transaction approach, preferred 2 to 1 over the next most popular pricing model, offered customers a set fee of $0.25 to $0.75 cents for each transaction. The next most popular option, among five pricing models, was the fixed monthly fee set between $15 and $30, according to the survey.

Respondents overwhelming said that the pricing model they choose best reflected what they believed to be total transparency in account and service pricing.

“Retail banks’ free checking model has been withering away since 2009, and margins continue to erode,” said Jim Eckenrode, the executive director of the Deloitte Center for Financial Services. “The basic economics of retail banking are under substantial pressure, given reduced non-interest income from traditional sources like debit interchange and overdraft fees. The question now becomes how banks move away from the free model, which a number of other industries have struggled with and often to the detriment of customer relationships.”

The survey – unveiled as part of a report titled, Retail Bank Pricing: Resetting Customer Expectations – finds that there is considerable aversion to price increases, with many consumers believing that banks are not being fair in raising fees. What's more, consumers intend to switch banks if fees are increased on existing services. Almost one in four consumers surveyed (22%) say that a $5 fee increase would definitely cause them to switch banks, and another 36% said that such a move would probably cause them to do the same. Of those on the fence, even more might switch in response to a $10 fee increase.

Among other findings:

Customers seemed open to a variety of options when asked to rate the appeal of a range of new pricing and service models in exchange for reduced fees.

40% of survey respondents expressed interest in a digital banking plan that would offer reduced fees while providing a limited level of in-person services, suggesting a significant appetite for primarily electronic account services.

There were notable differences across age groups. For example, high balance requirements were relatively more popular among older respondents, and a discount for favorable social media activity was the most popular option among the youngest respondents.

While 65% believe that all banks are only looking out for their own benefit, most consumers are satisfied with their primary bank.

More than one-third of consumers surveyed had no estimate of the cost that banks incur to service their accounts, with 87% believed they paid $10 or less per month — while the industry average is estimated at double that amount, between $250 and $300 a year.

Interestingly, differences in price sensitivity and industry perceptions appear not to be driven by demographics, but largely by individual experiences and beliefs. According to the Report, statistical cluster analysis of the data indentified three distinct groups of bank customers classifiable along the two broad axes of willingness to pay and perceptions of banks: the Loyalists, the Frugalists, and the Distrusters.

“Banks should account for differences in perceptions and price sensitivity among their customer base by rethinking their approach to customer segmentation,” said Brian Johnston, a principal and the banking and securities leader for Deloitte Consulting LLP, as well as a co-author of the survey. “How you treat a ‘Loyalist’ versus a ‘Frugalist’ – two of the bank customer types we identified – is going to be one big challenge. But effectively responding to those in the third category, the 'Distrusters,’ is critically important. Organizations that invest the time and resources to understand how their customers feel about the bank, as well as their wiliness to pay for services, can achieve their desired results as they make adjustments to their pricing methods.”

The key recommendation from the report is that banks must focus on communication and transparency, not demographics when reworking pricing models.

“The lack of easy demographic identifiers for pricing preferences means that banks’ insight into their customers will be key, and re-working pricing models will require engagement across multiple dimensions. The aim, of course, should be to build loyalty and satisfaction through better-tailored, high-quality services and offerings, the combination of which can help to drive customers’ willingness to pay for products and services. After these steps, banks will likely receive ‘permission’from their customers to make significant changes to their pricing policy,” concluded Johnston.

The report can be found online at www.deloitte.com/us/retailbankpricing.

This survey of 4,271 U.S. individuals was conducted online by Harris Interactive on behalf of the Deloitte Center for Financial Services in August. For the complete survey methodology, please see the full report.

Source: Deloitte Center for Financial Services

The Deloitte Center for Financial Services, launched in 2008, provides insight and research to help improve the business performance of banks and capital markets firms, private equity firms, hedge funds, mutual funds, insurance providers and real estate organizations operating globally. Headquartered in New York City, the Center is staffed by a group of professionals with a wide array of in-depth industry experience, as well as cutting-edge research and analytical skills. Former American Bankers Association leader Don Ogilvie serves as the independent chairman of the Center and also includes Howard Mills, a director with Deloitte Services LP, as a chief adviser.

ABA: Sharp Increase in Mobile Banking Popularity

2012-10-09T18:16:55Z

August 9, 2012: ABA Press Release/WASHINGTON: A new survey by the American Bankers Association shows a sharp increase in the popularity of mobile banking, driven mainly by customers in the 18 to 34-year-old age group.

The survey of 1,000 U.S. adults, conducted August 2-6, 2012 by Ipsos Public Affairs, an independent market research firm, revealed that while the Internet remains the most popular banking method, mobile banking is now preferred by 6% of customers, a 100% increase from 2010, and by 15% of 18-34 year olds, also known as “millennials.”

This is the fourth year in a row that customers have named the Internet as their preferred method of conducting their banking, with 39% of respondents saying it is the method they “use most often to manage (their) bank account(s).”

The second most popular way to bank – visiting a branch – continued a downward trend to 18%.

“The survey results show consumers have a clear preference for the speed and convenience that come with Internet and mobile banking,” said Nessa Feddis, ABA senior counsel and retail banking expert.

When asked “Which method do you use most often to manage your bank account(s),” customers responded as follows:

Internet Banking (laptop or PC) – 39% (36% in 2010)
Branches – 18% (25% in 2010)
ATMs – 12% (15% in 2010)
Mail – 8% (8% in 2010)
Telephone - 9% (6% in 2010)
Mobile (cell phone, Blackberry, PDA, I-Pad, etc.) – 6% (3% in 2010)

“These results show customers are embracing new technologies that make managing a bank account simpler, easier and more convenient but that doesn’t mean that the traditional bank branch is going anywhere,” said Feddis.

“Branch design may evolve as a result of declining foot traffic. However, we know that nothing replaces human interaction and that’s why branches will never disappear,” she added.

Online banking first became the most preferred banking method in 2009 with 25% of customers naming it as their favorite. Previously, visiting a branch was the most popular method, followed by ATMs.

About the Survey

The survey’s margin of error is +/- 3.1 percent. These are some of the findings of an Ipsos poll conducted August 2-6, 2012. For the survey, a national sample of 1,000 adults aged 18 and older were interviewed by telephone. Weighting was employed to balance demographics and ensure that the sample's composition reflects that of the universe. A survey with an un-weighted probability sample of this size and a 100% response rate would have an estimated margin of error of +/- 3.1 percentage points 19 times out of 20 of what the results would have been if the entire population of adults aged 18 and older in the United States had been polled. All sample surveys and polls may be subject to other sources of error, including, but not limited to coverage error, and measurement error.

The American Bankers Association represents banks of all sizes and charters and is the voice for the nation’s $14 trillion banking industry and its two million employees. Learn more at aba.com.

# # #

Online Banking Apps: A Key to Attracting New Customers

2012-09-12T14:55:56Z

September 11, 2011: According to Jim Van Dyke, President at Javelin Research, half of all consumers who are newcomers to online banking or recently switched banks felt that banking online gives them more effective personal finance management.

Javelin also found that, for consumers considering switching to a new financial institution in the coming year, this figure jumps to 72%.

These expectations create a huge opportunity for financial institutions to strengthen their online banking offerings and impress this group in the near future," writesVan Dyke in a statement.

“Consumers are telling [financial institutions] that online banking and bill pay isn’t good enough, and [financial institutions] aren’t listening,” according to Van Dyke. “[Financial institutions] need to get to the heart of what consumers really want and take online banking and bill pay to the next level.”

“The way to do this is to make online banking the foundation of personal banking and shift the focus away from simply completing transactions.”

Javelin recommends that financial institutions shift “from a traditional transactional role to a more consultative one” in order to energize online banking efforts and help consumers become better money managers in the process.

FMS offers Mortgage Market Insights using HMDA

2012-09-07T20:59:30Z

September 7, 2012: Chapel Hill, NC: What are your competitors up to? Who really is most aggressive in marketing in taking mortgage applications? What are the turn-down rates of the market leaders, and what types of loans are they looking for? What opportunities exist for the growing your market profiles? Financial Marketing Systems, Inc. can answer these questions and more--using actual HMDA records.

FMS' HMDA extensive database can profile your specific market down to the census tract--including five year trends, and five year demand projections. In addition to complete mortgage application and approval records for your market, database marketing specialists at FMS can overlay census demographics, market demand, and five-year projections to help you hone resource allocations and target specific opportunities in your market.

For more information, click here, or contact Bob Singer at BobSinger@bankmktg.com, 1-815-398-2474 Or contact Mark Rodrigues at Mark@bankmktg.com, 1-919-240-7059.

You too can Win! North Carolina CUs create Lottery-linked Savings Accounts

2012-08-29T13:46:57Z

August 29, 2012/ Raleigh, NC: Like the idea of winning $10,000, $25,000 or even $100,000? Just open a savings account at a North Carolina credit union.

By opening a $25 certificate of deposit at a participating credit union, the member will be entered to win monthly prizes and an annual grand prize. Each time a $25 certificate is opened, the member receives additional chances to win, up to ten entries per month. Dividends are paid on all balances even if the member doesn't win a prize.

Passed unanimously by the legislature, and signed into law this past June, North Carolina credit unions may now use lottery-like prizes to encourage their members to save. "Save to Win" is set to roll-out with ten credit unions January 2013.

The newly-passed bill exempts savings promotion raffles like Save to Win from the two raffle per year limit imposed upon credit unions. Gaining the exemption was necessary to allow for monthly prize drawings in Save to Win campaigns, thus encouraging credit union members to develop a regular habit of saving. The bill also defines a savings promotion raffle under the General Statues governing credit unions requiring that money be deposited into a special savings account in order to win.

"This is a tremendous development for credit unions and a key step in helping them promote savings to their members in an exciting and innovative way," said Lauren Whaley, Director of Legislative & Regulatory Affairs for the NC Credit Union League.

The Save to Win program credits its roots to Doorways to Dreams, a non-profit organization created by Peter Tufano of Harvard Business School. Research conducted by Tufano found that incentive-based savings programs in foreign countries successfully helped low-income families save money.

A pilot program conducted with Michigan Credit Unions in 2008, validated the concept. In that test, 11,000 individuals saved in less than one year over $9 million. Over half the participants have never saved on a systematic basis before. Michigan's program now boasts over 28,500 participants and $37 million in savings.

The North Carolina Credit Union League sponsors the Save to Win program which will use the same program format developed by the Michigan Credit Union trade association. “The experience Michigan has had with Save to Win points to a program that promotes savings among people of modest means, and is very popular,” said Eric Gelly, NCCUL’s EVP/COO.

Source: North Carolina Credit Union League; Association Executives of North Carolina’s Success by Association magazine, July/August 2012.

Two New Checking Fees Surveys for mid-2012

2012-08-28T19:12:09Z

August 13, 2012: Bankrate.com and MoneyRates.com each recently examined checking account fees through the second quarter of 2012.

According to Bankrate.com's 2012 Credit Union Checking Survey, 72%of the 50 largest credit unions offer free checking accounts without a minimum balance requirement, down slightly from 76% last year. An additional 10% of these credit unions will waive monthly fees if account holders maintain a minimum balance ranging from $100 to $750.

Only 45% of banks offer free checking without minimum balance requirements, according to Bankrate.com's latest research, and banks' minimum balance requirements tend to be much higher ($585 for non-interest-bearing accounts and a staggering $5,587 for interest checking accounts).

"Overall, 98% of the credit union checking accounts that we surveyed are either free or can become free if the account holder meets minimum balance, direct deposit and/or e-statement requirements," said Greg McBride, CFA, Bankrate.com's senior financial analyst. "So credit unions remain a viable, consumer-friendly alternative for finding a free checking account."

The majority of the credit union checking accounts that Bankrate surveyed (68%) do not pay interest. Those that do yield an average of 0.12%, down from 0.17% last year, which is consistent with the ongoing declines seen in cash investments.

Even at credit unions, overdrafts will cost you. The average cost of the first overdraft is $26.65, up from $26.05 last year, compared to $30.83 at banks. The most common fees assessed are $25.00 and $30.00, compared to the most common fee of $35.00 at banks.

Other Fees

30% of the credit unions that Bankrate surveyed have either no ATM fees outside the network or provide at least one free withdrawal per week before the fee kicks in, comparable to 29% of banks.

96% of credit unions surveyed will charge a non-member for using their ATM.

The average credit union ATM surcharge is $2.08, almost identical to $2.10 last year, versus $2.40 at bank-owned ATMs. The most common credit union surcharge is $2.00, compared to $3.00 at banks.

MoneyRates.com Bank Fees Survey is a semi-annual study that examines national bank checking account and ATM charges, which found for the first half of 2012 that fees are on the rise.

The latest data, which MoneyRates.com collected in July, suggest that the fee environment worsened for bank customers in virtually every way possible in the first half of the year. However, the results also indicate that consumers still have several options for combating these costs. The following are some notable trends in bank fees -- and what consumers can do about them.

Checking fees rise across the board
Compared to the end-of-year 2011 Bank Fees Survey, average checking account fees rose in every major category tracked:

Key Findings

Minimum required to open an account. The average amount required to open a checking account was $408.76 in this survey, up 4.4% from $391.41 in the previous. The higher this minimum becomes, the more poorer customers may be forced to go unbanked.

Monthly service fees. Among banks that charge a monthly fee, the average cost was $12.08, up 7.1% from $11.28. At a total of nearly $145 per year, these monthly maintenance fees can take a serious bite out of your savings account balance.

Minimum balance for fee waiver. Banks will often waive the monthly fee for customers with more on deposit, but the amount you have to keep in your account to get this waiver is going up. The data show an average of $4,446.57 to get a monthly fee waived, up from $3,590.83.

Overdraft fees. Overdraft fees jumped to an average of $29.83, up 2% from $29.23.

Percentage of accounts offering free checking. Contrary to many reports, free checking is not dead, but it is becoming more scarce. Only 35.3 percent of the accounts surveyed were free of a monthly maintenance fee, down from 38.8 percent.

ATM fees. ATM fees also increased, both for bank customers using out-of-network machines and for non-customers using a bank's ATM.

Previous surveys have tended to show more of a mixed bag, with some fees rising and others falling. But the latest survey shows a comprehensive trend toward checking accounts becoming more expensive.

Differences by size and type of bank

While the trend toward higher fees seems decisive, it is by no means universal. The average fees in the survey varied widely between different sizes and types of banks.

The average monthly maintenance fee was $13.88 at large banks (those with more than $25 billion in deposits), while it was only $9.87 at small banks (those with less than $5 billion in deposits). At medium-sized banks, the average monthly maintenance fee fit in between at $11.17. The average minimums to open an account and to qualify for a fee waiver were higher among the large banks surveyed too.

The results also indicate that small banks are much more likely to offer free checking. There was no monthly maintenance fee at 45.8 percent of the accounts at small banks in the survey, whereas only 21 percent of the accounts at large banks were free of those fees.

Fee structures also differed greatly between primarily online banks and traditional branch-based institutions. Two-thirds of online checking accounts were free of monthly maintenance fees, compared to just 34 percent of those offered by traditional banks. The online banks that do charge monthly fees also tended to charge lower amounts than traditional banks, and their average account minimums, overdraft fees and ATM fees were lower too.

TD Bank Checking Poll: Convenience Remains Key

2012-08-28T18:57:54Z

CHERRY HILL, N.J. and PORTLAND, Maine, Aug. 23, 2012 /PRNewswire/ -- When considering the overall value provided by services that involve a bill or fee, a poll released today by TD Bank found that over half of consumers (57%) cite day-to-day banking as providing the greatest value for their investment.

The survey, involving more than 1,200 consumers across the U.S., revealed that when it comes to value provided by their checking accounts and day-to-day banking needs those factors related to convenience ranked highest. The top elements considered to be the most valuable included:

Debit card, not having to carry cash (57%)
Convenient bank store locations (47%)
Convenient ATMs (45%)
Options for no, or reduced fees (41%)

"Whether it is online banking, access to a wide network of ATMs or convenient store locations and hours, it's important to know you have choices when it comes to finding a bank partner to fit your individual needs," offered Ryan Bailey, Senior Vice President of Deposit Products at TD Bank. "From extended hours to 7-day-a-week availability in many stores, at TD Bank, we remain committed to providing a legendary banking experience with the best value and greatest convenience."

Men and Women viewed Convenience differently

The TD survey found gender differences regarding perceptions of banking value and convenience. Men were most likely to note easy online banking (63%) and convenient ATMs (46%) as the most valuable elements to their checking accounts. Women cited convenient bank hours (30%) and branch locations (52%) as the most valuable.

The Branch is Online

Survey participants said they were more likely to go online than visit a branch, estimating using the Internet to manage their finances an average of five times per month. When visiting a bank, most people go in-person on weekday mornings (37%) or weekday afternoons (36%). However, according to the poll, consumers would like to visit banks in the evening or on weekends more than they currently do (30% versus 19%).

Other Key Findings

Consumers rank friendly, helpful and personal customer service (34%) over waiving or providing no fees (29%) as the most appreciated thing their bank has provided.
When it comes to carefully reading mail and/or email from their bank, 15% don't read their bank mail and 11% don't read their bank emails.
The majority of checking account holders spend close to three hours per week taking care of their finances.
Over one-half of consumers polled have opened a new checking account in the past five years.

Survey Methodology

The study was conducted among a nationally representative group of U.S. consumers from August 2 nd-8th, 2012. The sample size of 1,231 has a margin of error of +/-2.3%. The survey was hosted by global research company Angus Reid Public Opinion.

SOURCE TD Bank

Credit Unions Accelerate Mortgage Lending

2012-08-28T18:54:26Z

“Credit unions have stepped up their role over the past five years as the mortgage lending market has undergone an unprecedented transformation,” says Jay Johnson, executive vice president for the financial consulting firm Callahan & Associates. “The key for credit unions will be in continuing to drive these trends as the housing market shifts from a refinance to a purchase market.”

Credit unions reported $84.5 billion in loan originations for the quarter ending June 30. Combined with first quarter originations, activity through the first six months of 2012 totaled $157.0 billion. This shatters 2009’s standing record of $144.3 billion originated in the first six months of the year.

During the major refinance wave that began in the first half of 2009, credit unions originated more than $55 billion in first mortgages. Credit unions originated more than $56 billion in first mortgages for the first six months of 2012 and captured 7.6% of the market.

“Credit unions are continuing to build momentum in the marketplace and are increasingly seen as a go-to source as consumers look at their financial options,” Johnson says. “We are seeing this in lending trends, which are following the acceleration in membership growth across the country. Members are not only joining credit unions, they are also bringing with them their full financial relationships.”

Source: Callahan & Associates

Do Credit Unions offer More than Banks?

2011-09-26T15:22:52Z

September 18, 2011: According to data recently available from CUNA, credit unions are more likely than a typical bank to offer new auto loans and credit cards. Credit Unions, in terms of percentages of institutions, may be less likely to offer ATM access, mortgages and IRAs.

CUNA’s summary data shows the following percentage of credit unions offering:

New Auto Loans 95

Online Banking: 67

IRAs: 65

ATM Access 63

First Mortgages 60

Credit Cards 52

Check Cashing 51

Overdraft Lines of credit 44

Source: Credit Union National Association and National Credit Union Association data, year-end 2010, as report in the WSJ, September 18, 2011