Author: Brandon Kunz, email@example.com
In a recent Celent survey*, over half of all financial institutions stated that their #1 channel priority is the branch network. Most are focused on cost reduction efforts to one degree or another —understandable, given the significant branch infrastructure already in place. However, the top priority respondents cite for the branch is to improve sales and service results. Financial institutions are specifically looking to leverage the face-to-face interactions that uniquely occur in the branch to drive customer engagement and strengthen customer relationships. It is these interactions, in turn, which will drive improved cross sales and retention efforts.
So, what if you could achieve both objectives at the same time? Proper eating and exercise work together to create the ideal environment for weight control. Similarly, opportunities to simultaneously reduce costs and increase value to the customer present the optimal scenario for financial institutions in their efforts to drive the branch to higher growth and profitability. In the popular business book, Blue Ocean Strategy, targeting and rallying around such opportunities is referred to as Value Innovation.
Teller image capture provides just such an opportunity for Value Innovation. From a financial standpoint, teller image capture enables the financial institution to take advantage of a dramatically improved cost structure, providing significant cost savings in the back office as well as within the branch itself. This is why most financial institutions considering a teller system upgrade or replacement find that such efforts are very difficult to justify without the financial benefits provided by teller image capture.
Teller image capture also helps the financial institution change the focus of its tellers from transaction-centric exchanges to value-added interactions. Such interactions help create a consistent, high quality experience for the customer that reinforces the financial institution’s brand and strengthens customer relationships. This is becoming more and more important as customers move away from visiting the branch for routine transactions in favor of preserving the branch option for their most critical needs.
At these critical times, with teller image capture in place, the teller can be much more attentive to the customer. This puts you in a position to uncover lucrative revenue opportunities and present relevant offers to customers at the right time and in the right way. In fact, teller image capture is key to being able to fully leverage other branch investments like CRM: again, by freeing the teller from transactional activities so they can take advantage of these tools in their efforts to engage the customer, strengthen relationships, and improve sales results.
So, if you are looking for your next step to increase the value of your branch network, look no further than teller image capture.
*Celent, August 2010, Branch Banking in a Multichannel World: What Ever Happened to the “Branch of the Future?”
Author: Chris Sutherland, CSutherland@jackhenry.com
Almost any Network Administrator you poll will tell you that the #1 pain point in their organization is backing up the data on their network. The problem is that as data grows, the tools and solutions used to back up the information simply do not keep up at a good pace. So what options exist to help your IT department with this challenge?
While in the past using backup tapes has been commonplace, tapes are notorious for running out of space and can only be written to so many times before they become unreadable. What if you don’t know that and your system goes down, then you need to get it back up and running?
From experience, I can tell you that if you are using tapes, you’d better hope the tape is readable and has backed up everything you need. And since tapes can only write so fast, you should plan to spend several hours working on that project. There has got to be a better way, right?
Now for some good news: New products have come out that offer help with the backup dilemma. One of the latest solutions on the market, AppAssure® Replay4®, has provided some of the largest leaps in backup technology advancement over the last several years. It is a tapeless backup solution that offers:
- Up to 8GB/minute backup and recovery speeds
- Block-level snapshots with incremental forever data capture
- Integrated server level de-duplication that reduces your backup storage footprint by up to 80%
- Flexible disaster recovery options, including bare metal restore and failover virtual machines
- Replay Live – which allows you to start a server rebuild and have access to data almost immediately
- Server rewind feature that gives you the ability to roll back to any point-in-time, and recover the entire server or individual files, emails, SharePoint, and SQL objects
- Application-aware modules that check data consistency to ensure successful recoveries every time
- Integrated replication to reduce storage costs and enable off-site and cloud-based backups
- Centralized enterprise console to manage a large number of servers and desktops
Another option to consider is offered by Riverbed®, the leader in WAN (Wide Area Network) optimization. Riverbed has created an appliance that can assist you in getting your backup solution offsite. Its Whitewater Public Cloud Storage offers offsite “cloud” data protections, providing storage and a local repository of your data, while minimizing the bandwidth needed to perform the tasks of getting your information securely offsite. A future release of the appliance will include the ability to use storage at your Disaster Recovery location to have your backups available at your site as well. This could revolutionize backup solutions even further.
As you can see, there are some new options out there to help you solve the ever-challenging “backup puzzle.” The days of relying on tapes – and keeping your fingers crossed that you have enough space – will hopefully become a thing of the past. And IT departments can spend those business hours on better things.
Your Chance to Speak
What’s been the experience at your FI? How do you solve the “backup puzzle”?
Author: Lee Wetherington, LWetherington@profitstars.com
So let it be written, so let it be done.
Two weeks ago, the Fed issued its final rule on Durbin. We now know the debit interchange cap is 21 cents. We know .05% of the transaction amount is allowed to cover fraud loss. And we know fraud prevention can command an additional cent.
What we don’t know is to what extent any of this will affect the 99% of U.S. financial institutions that are technically exempt from the rule’s rate provision.
Are market forces so efficient—and merchant routing/steering abilities so discriminating—that smaller financial institutions will experience indirectly the same 45% reduction in debit interchange that the final rule exacts directly from those with assets above $10 billion?
Never has so much rested on so many variables. To sum up, the rule will either devastate the non-interest income of most institutions…or not so much. The only option is to remain vigilant, plan for the worst, and look for new opportunities created by the rule’s final language.
There is some good news. The final rule effectively doubled the cap on debit interchange proposed in the initial rule. According to Moody’s, the higher cap spares our industry $3.5 billion in revenues that would have otherwise gone away. Though the rule provides no enforcement mechanisms to protect smaller issuers’ exemption, both Visa and MasterCard have openly committed to supporting the two-tier rate structure necessary to accommodate smaller institutions’ uncapped interchange rates.
Also good was the Fed’s choice to go with the less onerous of two alternative routing provisions, ultimately requiring only two unaffiliated networks on each card rather than four (two PIN, two signature) and extending the compliance deadline for this provision to April of 2012.
The bad news, again, is that through the forces of supply and demand financial institutions of all sizes potentially face the same 40-45% reduction in debit interchange revenue that the big boys do.
Also of concern is that competing “three-party” alternative payment networks like PayPal are exempt from the rule altogether, as they do not meet the rule’s definition of a “payment card network.” This may inform and revise the friend-or-foe inclinations of financial institutions considering partnerships with PayPal. Some may see PayPal as a more threatening, some a more attractive, payments partner.
Keep in mind, however, that PayPal, as an exempt entity, must also ultimately reckon with the same market forces that threaten the technical exemption of smaller financial institution issuers. If, though, PayPal and “three-party” networks effectively establish a cap-free oasis, look for this to drive partnerships with small institutions looking for creative fee-income generation and protection alternatives.
The Utterly Unknowable
Speaking of alternatives, how exactly will the new rule apply to or be enforced upon virtual debit cards or new mobile/digital/RFID payment mechanisms? Will innovations in e-wallets and new payment form factors benefit or stall from the rule’s silence? Stay tuned for the Fed’s commentaries, staff interpretations, and one-off “comfort letters” that will address these unknowns.
Even less predictable but potentially more important will be the gray areas left by the rule’s definition of “interchange.” Per the rule, caps apply only to fees charged to the merchant/acquirer that are passed to the issuer, but networks are not required to pass to the issuer the same amount of fees charged to the merchant/acquirer. This leaves room for a lot of creative arbitrage on behalf of the networks.
Other Durbin stock market winners included GreenDot, the prepaid card issuer/processor. Since the exemption for general purpose reloadable prepaid cards remained largely intact for exempt issuers, expect financial institutions to renew their interest and evaluation of prepaid card products to supplement fee income and serve a fast growing segment in the post-Durbin era: the unbanked and underbanked who can’t afford the new “Durbin” fees many banks will now levy to recoup their losses.
So let it be written, so let it be done.
Author: Deborah Matthews, firstname.lastname@example.org
If your FI fails to prioritize products and services aimed at the 78 million-strong Baby Boomer generation, do so at your own peril! Boomers:
- Have 70% of the nation’s net worth
- Command ½ of all households’ discretionary income
- Spend $2 trillion annually on consumer goods and services
- Are less likely than other demographics to switch their FI over fees
One in four Boomers currently working believes they will never retire. Perhaps that’s because many Boomers will seize the opportunity to innovate and create start-ups. Boomers between 55 and 65 will start more small businesses than any other demographic. FIs can support these endeavors by offering services designed specifically for small businesses and efficient, self-serve technologies like remote deposit.
Or maybe it’s because more than 40% of Boomers believe their financial resources will be insufficient when they retire. Boomers hit hard by the recession may not have the advantage of time to fully recover financially. Two-thirds expect to rely on Social Security as their main source of retirement income, and 24% have no savings. Given the uncertain future of entitlement programs like Social Security and Medicare, maintaining income and financial independence may be challenging for some Boomers. Products like retirement planning and long-term care insurance represent profitable opportunities for FIs. (FIs offering insurance earned more net income than those who do not have insurance operations, according to the Bank Insurance Market Research Group.
Boomers are embracing technology and social media in record numbers: They spent an average of $850 for their latest home computer — $50 more than any other group, reports Forrester Research. Boomers are the fastest growing segment of social media users, flocking to Facebook to keep in touch with family members. However, they are potential targets for identity theft because they are less likely to utilize privacy settings on social media sites, states Javelin Strategy and Research. And, identity theft and fraud doesn’t always occur at the hands of strangers. FIs are in a key position to help spot identity theft and elder financial exploitation. Check out FinCen’s FI Advisory red flags that indicate possible anomalous activity.
The Boomer Project developed an extensive list for understanding this important demographic. Consider attributes with particular relevance for FIs:
- Boomers want to simplify their lives and create more time
- They expect respect and attention because they think they deserve it, not because they’re older
- They are forward-thinking and interested in social engagement and self-actualization
- Many are sandwiched between caring for elderly parents and boomerang adult children returning home
- Boomers want value and choices that are right-sized
- Avoid the language of aging; most Boomers see themselves as 12 years younger
- They expect clear communication and ease for responding to calls-to-action
FIs should take stock of their approach to serving and celebrating the Baby Boomer generation. It’s no surprise that the generation that launched rock and roll approaches life in unconventional ways. It’s essential to develop fresh concepts to market to the confluence of Boomer life-stages: employee, empty nester, grandparent, retiree, entrepreneur, but first and foremost: active, profitable customer.
“The Golden Age of Innovation”
“Big-spending Baby Boomers bend the rules of marketing”
“ABA Study: Consumers Prefer Online Banking”
Turning Silver into Gold: How to Profit in the New Boomer Marketplace, by Mary Furlong