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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Review of DDA Charge-Offs Can Indicate Room for Improvement

Most financial institutions are looking for ways--now more than ever--to increase or, at the very least, stabilize profitability. One place to start is to review the number of DDA accounts that you charge-off per year, as compared to your insitution's total DDA accounts.

If the charge-off percentage is above 8%, you may want to investigate why.

BSG Financial has found that financial institutions with charge-off percentages above 8% may have overdraft programs that are not operating at their full potential and could be "leaking" income.

An overdraft program that offers pre-charge-off routines, such as automated letters and phone calling, can help bring the number of charge-offs back into line and increase profitability...not to mention customer service and retention. If you want more information about reducing charge-offs and how it could help your institution, email Hank Thompson, executive vice president, at HThompson@BSGfinancial.com.

Does your institution routinely assess charge-off percentages and make adjustments if they're too high? If your charge-offs are already low, how do you do it?

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.

Review of Overdraft Program Could Uncover "Found Money"

It's no secret that most financial institutions are looking for new ways to boost income. But before you unleash the new product development hounds, don't overlook the tried and true programs--like overdraft protection--you already have in place. With a few simple tweaks to this program, you could potentially double your income.

BSG Financial offers a COMPLIMENTARY, no-obligation Overdraft Review to determine if your program could be earning more income and better serving account holders. The results of Review may confirm your overdraft program is working to its fullest potential. Or we may uncover "found income." Either way, you have nothing to lose.

To begin, answer a few brief questions. BSG Financial will report any areas of opportunity we identify, and suggest tactical program modifications, if applicable. You can implement any of these modifications on your own, with no obligation whatsoever to BSG Financial, or you may wish to enlist our services.

Start the Review here. It only takes a few minutes, but could reap significant rewards!

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.

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.

Life is Contagious

What does the video below have to do with the banking industry? Perhaps absolutely nothing; but, we couldn't resist bringing it to you, because it WILL make you smile. And maybe that's reason enough in today's financial environment.

(It is a commercial for T-Mobile that was shot at the Liverpool Street Subway Station in London in January 2009. Only the dancers knew what was happening; the general public didn’t have a clue what was about to unfold.)

Watch and enjoy!