Profitability measurement for today’s banks

While bankers historically have been focused on driving growth, the reality is that not all growth creates sustainable value or profits for banks. In fact, some industry estimates suggest that up to 40% of a bank’s customers may be unprofitable to their institutions. This underscores the level of complexity involved in effectively evaluating and managing profitability as Read More

By |2020-05-27T18:00:37-05:00February 17th, 2015|Comments Off on Profitability measurement for today’s banks

Deposit pricing game theory for rising rates

Twice in the past twenty years we experienced a cycle of decrease and increase in the Fed funds rate. And in both cases, institutions started increasing their rates slowly and gradually a few months before the Fed actually started increasing the funds rate. The most recent event occurred in anticipation of the Fed funds rate that took Read More

By |2020-05-27T18:00:37-05:00February 2nd, 2015|Comments Off on Deposit pricing game theory for rising rates

Rewards-based checking for rising rates

The Federal Reserve has signaled that rising interest rates might be on the way, raising the risk that community banks’ margins will be squeezed in the future. Help is available, though, and it comes from a somewhat surprising source: high-yield, reward-based checking accounts. While many banks use certificates of deposit (CDs) to mitigate rate increases, that’s a Read More

By |2020-05-27T18:00:37-05:00January 27th, 2015|Comments Off on Rewards-based checking for rising rates

Improving retail profitability with enhanced profitability data

Bankers continue to see pressure on net income and many are attempting to improve results by reducing expenses and maximizing fee income. In doing so, they are being reminded of just how hard it is to squeeze more net income out of current period revenue. The traditional assumption is that improving profitability means expense reductions. A better Read More

By |2020-05-27T18:00:37-05:00January 26th, 2015|Comments Off on Improving retail profitability with enhanced profitability data

No-Overdraft Fee Accounts, No Overdraft Problem

“Overdraft fees should not be ‘gotchas’ when people use their debit cards,” said Richard Cordray, director of the Consumer Financial Protection Bureau (CFPB), after the regulatory agency published its most recent report, “Data Point: Checking Account Overdraft.” The study states that most overdraft fees result from debit card purchases for amounts under $24 and are repaid within Read More

By |2020-05-27T18:00:40-05:00October 7th, 2014|Comments Off on No-Overdraft Fee Accounts, No Overdraft Problem

Serving the Underserved with Prepaid Cards

Half the world’s adults, over 2.5 billion people, do not have a formal bank account, according to the World Bank. In the United States, the segment of financially underserved consumers is substantial, whether they fall into the unbanked or underbanked categories. According to the FDIC, this seemingly high-risk group makes up over 10 million households across America. Read More

By |2020-05-27T18:00:40-05:00September 9th, 2014|Comments Off on Serving the Underserved with Prepaid Cards

Accelerating the Efficiency Engine

A new year is time for new resolutions. And for many banks, that means resolving to make their operations run leaner and better, at less expense. But that’s easier said than done, as many banks this year have struggled with efficiency ratios in the face of slow revenues. Case in point: The efficiency ratio at 230 banks Read More

By |2020-05-27T18:00:45-05:00February 4th, 2014|Comments Off on Accelerating the Efficiency Engine

Using Analytics for New Product Design

As the financial services industry emerges from the great recession and adapts to the new regulatory and slow-growth environments, financial institutions are being pressured to find new ways to generate revenue. The data that financial institutions hold is incredibly valuable and leveraging it to attract and retain business may be one of the best ways for institutions Read More

By |2020-05-27T18:01:04-05:00June 19th, 2013|Comments Off on Using Analytics for New Product Design

Banking’s Big Opportunity with Small Dollar Loans

Financial institutions (FIs) determined a long time ago that it was hard to earn a profit making consumer loans for a few hundred dollars. As Mark Pearce of the FDIC commented in 2012 on reviewing the FDIC’s Small Dollar Loan Pilot started in 2008, “the interest income and fees generated were not always sufficient to achieve short-term Read More

By |2020-05-27T18:01:05-05:00May 7th, 2013|Comments Off on Banking’s Big Opportunity with Small Dollar Loans

Who Owns Cross Selling (and Who Should Own It)?

So, when was the last time you went to a meeting and the subject of cross selling didn’t come up? In all likelihood, the conversation turned to the results of the latest cross-selling campaign, the plan for the next one and the projected return on investment (ROI). While we’re all keenly aware of the opportunities cross selling Read More

By |2020-05-27T18:01:05-05:00May 1st, 2013|Comments Off on Who Owns Cross Selling (and Who Should Own It)?