Fly on the Wall

Here's an Idea for Washington: 'Unintended Consequences' Day

So... what if every financial institution in the country agreed to--on the same day--return ALL of their customers' overdrawn items? (Consider it a test of what might happen.)

How do you think your customers would react to being charged an overdraft fee, PLUS a returned check fee, AND possibly a late fee?  

Based on the Senate and House bills as they are written, most banks will have to resort to becoming a "return-all" bank, as in the scenario above. And this is apparently what the legislators in Washington think your customers want.

So maybe we should select a day and see if they are right.

We'll call it 'Unintended Consequences' Day. Is your institution in?

Overdraft Action Brings Positive Reaction

It's no secret that your financial institution's earnings are at risk. The overdraft programs that generate a large portion of a bank's income are under attack. (See related New York Times story here.)

Although most legislative bills are initially written in the harshest terms possible, then amended to a softer stance, it is BSG Financial's belief that overdraft programs as we know them will be significantly changed.

In fact, much of the overdraft income you enjoy today may be legislated away. And with the proposed consumer warnings and options, many of your customers may opt out of the overdraft program. As a result, most banks will simply start returning checks again.

But for every action, there is a reaction.

If this happens and more overdraft items are returned, the number of returned deposit items for your business customers will increase..along with the headaches of collecting these funds. As such, BSG Financial's Re$ubmitIt electronic check recovery program will be a key solution for your commercial customers AND your bank.

Re$ubmitIt helps business customers collect more NSF checks with less work. It helps your bank realize much-needed income to offset the anticipated lost OD revenue. It is simple to implement. It is completely compliant.

Strategically, there is no better time to consider the Re$ubmitIt program than right now.

Learn more here.

Contact BSG Financial today and start earning immediate income. We're implementing banks daily. Don't be at the back of the line!

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Don't Pile On--Offer Business Customers A Valuable Service for FREE

According to a news release on yesterday's BusinessWire, fees on business checking accounts have risen 10.3 percent in 2009. This isn't much of a surprise, of course, since many financial institutions have had to increase fees for services this year simply to stay afloat.

Especially now--when everyone feels like they're paying the price for the struggling economy--wouldn't it be nice to offer your business account holders a valuable service that will increase their cash flow... for FREE? No strings attached. No fees.

Not a problem, with BSG Financial's Re$ubmitIt electronic check recovery program for business account holders. The program--which also INCREASES INCOME for the financial institution--collects more of the funds businesses are owed from NSF checks and other returned deposit items.

Business customers pay nothing for the service. They do none of the collection work. They thank their financial institution for helping them out when it counts.

At a time when every penny counts, give your business customers FREE, not fee.

Higher FDIC Insurance Premiums: Who Picks Up the Tab?

Earlier this year, FDIC Chairman Sheila Bair warned that the banking industry would possibly face additional deposit insurance premiums by yearend. "We think there is a good probability that we will have to do another special assessment in the fourth quarter," she said in May.

Based on the number of bank failures since then (43 banks, with $41 billion of assets), the 'probability' looks more like a certainty in order to replenish the Bank Insurance Fund.

How will you pay for these additional assessments?

Whether you're looking to increase income or decrease expenses, BSG Financial can help you 'pick up the tab.'

Our Re$ubmitIt electronic check recovery service increases income for your institution and your business account holders by electronically collecting funds from returned deposit items.

Our ExpenseMark sourcing and procurement program can cut expenses by 25% to 40% in selected cost target areas.

Too Scared to Tweet?

Facebook. Twitter. LinkedIn. Is your financial institution contemplating marketing via social media? Or are you concerned about opening yourself up to criticism, or worse, litigation?

Lawyer Kevin Funnell has this to say on his Bank Lawyer's Blog:

I think that much, perhaps most, of the concern about the legal risks of social media marketing by financial institutions arises from the understandable fear of the unknown. The media is relatively new, banks are traditionally conservative, and lawyers are risk mitigators, not risk takers. Thus far, banks are experimenting with the media, and 'the jury is still out.' In other words, many banks don't yet 'get it.'

Nevertheless, social media is the way through which much of the world is relating to one another, especially among Gen Y, and banks are going to have to learn to embrace the media if they want to effectively reach those who use it. It's a huge group of human beings (larger than the Boomers) who are coming of age using social media as second nature.

Legal risks or no legal risks, banks will have to come to terms with it.

Perhaps you don't have to be a hare to be in this race, but you sure won't be able to win it as a tortoise.

Although Mr. Funnell says he finds the legal risks of the use of social media to be overblown, there are other issues, to be certain, that must be considered. Who at your company will be your social media "voice"? On which sites will you concentrate your efforts? How will you respond if someone impersonates your company?

Mr. Funnell offers these checklists of the legal and human resources issues surrounding social media.

U.S. Consumers Need More Financial Education

According to a December 2008 study from the Center for Economic and Entrepreneurial Literacy (CEEL), there is a need for increased education on personal finance and economic issues. The national survey showed that a disturbing number of Americans are unable to answer simple questions about borrowing, interest rates and even basic math. Many respondents also admitted to making poor decisions with their own finances.

Highlights from the survey include:

• 54% of respondents could not identify what a subprime mortgage was.

• 56% of respondents could not identify FICO score as the most important factor in getting a loan.

• 65% of respondents could not identify what would remain if you subtracted 25% from 8.

• One in three respondents could not identify what 1% of 50,000 was.

• 75% did not know that, when in need of short-term emergency cash, bouncing a check costs more than wire transfers, credit card advances, and short-term payday loans.

• Half of respondents have overdrafted their checking account at one time, while a third of respondents have paid a bill late in the past year.

Online literacy education resources for financial institutions:

Money Talks--a free newsletter series for bankers to share with their customers, from the ABA Education Foundation.

Money Smart--a comprehensive financial education curriculum designed to help individuals outside the financial mainstream develop financial skills and positive banking relationships, from the FDIC.

OCC Advisory Letter on financial literacy

Teach Children to Save website

What are you doing to better educate consumers? Let us know.

Personal Savings at Highest Point in 15 Years

From The New York Times this morning--

The GOOD NEWS: personal incomes rose sharply in May.

The BAD NEWS: many people are putting their money away instead of spending it. 

So, what does this mean for the economy?

According to the article:

Although saving money helps individuals repair their finances and pay debts, a sharp rise in overall personal saving can actually deepen a recession and hurt the people who are saving more. As people save money, fewer dollars circulate through shopping malls, Main Street businesses, and large employers and subsequently back to workers through their paychecks. This thrift pulls the economy lower.

Economists say the recent spike in personal saving is likely to fall back slightly as the effects of government stimulus fade, but they have said that Americans are becoming thriftier and are not likely to return to the free-spending patterns that fueled much of the growth of the last nine years.

Read the entire article here.

Legal Challenge to Overdrafts...again

Every few years, financial institutions are legally challenged--without success--on the practice of recouping overdraft charges from accounts that have direct deposit of Social Security benefits. 

Here is an article from Reuters.com about the latest attempt, and failure, against Bank of America.

___________________________

Is your overdraft management solution meeting the expectations of your bank AND your customers? 

BSG Financial provides a NO-COST analysis to make sure! E-mail Hank Thompson, executive vice president, to request a no-obligation review.

Never Stop Learning

Learning is not compulsory... neither is survival.
W. Edwards Deming (1900 - 1993)

We're all feeling the pinch of tighter budgets these days; however, now is not the time to eliminate professional development. On the contrary, it is exactly the right time to share ideas, tactics and best practices, and learn new ways of thinking.

While the opportunities for learning are still abundant, the times require that you choose those that give you the most “take-away” information for your dollar.

One such opportunity is the Financial Revenue Strategy Symposium, May 18-21, in Dallas Texas, which focuses on developing new sources of revenue; implementing tactics that keep top performers on top; and executing a plan to bring in extra income. The keynote speaker is Nessa Feddis, Senior Federal Counsel of the American Banker’s Association.

Sessions include:

Generating Revenue During an Economic Standstill
Radar On – Antenna Up… Fulfilling Customers’ Unexpressed Wishes
Revenue and Regulation:  Outlook on the 111th Congress
Cashing in with Merchant-Based Income

The conference features all-inclusive pricing, which includes conference fees, all meals, 3 nights at The Ritz-Carlton, Dallas, and airport transfers.

For more information and to register for the FRSS, go here.

Tell us the professional development opportunities you will attend.

Our Full Plates

 full plate:

Fig. a full schedule; a lot to do.

Having recently attended the South Carolina Bankers Association Young Bankers Conference, we got a “fly’s-eye” view of what the banking industry is dealing with these days.

Even in the current cost-cutting environment, the SCBA Conference was well-attended by multiple banks. Apparently, we’re all clamoring for ways to juggle the myriad tasks and challenges we face.

Among the most popular topic was a renewed focus on customer service and the need for CRM systems to effectively retain and grow customers. The banking industry as a whole is also dealing with other pressing topics, including:

• FDIC insurance premium issues
• TARP applications and oversight
• E-Statements
• Reducing foreclosure action
• Stockholder meetings
• Consolidating redundant departments and trying to get more done with less staff
• Automating returns
• Setting up Remote/Branch Deposit Capture programs 
• And the list goes on…

Could outsourcing help you more effectively tackle many of these pressing issues? Click here to read an article by BSG Financial CEO, Barrett Nichols, on the benefits of outsourcing.

BSG Financial is committed to maintaining a presence at industry conferences throughout 2009 (see our upcoming schedule here), as well as developing solutions to help you “clear your plate.”

What issues are you currently tackling? We're interested in learning more!