What We’re Reading: Bank Fees, Bank Loans and the Best of BAI
Below are interesting stories the Banking.com staff has been reading over the past week. What have you been reading? Let us know in the comments section below or Tweet @bankingdotcom.
- Community Banks, CUs Benefit from B of A’s Debit Fee Fallout
Community Bank in southwest Florida is taking advantage of the recent PR nightmare large banks like Bank of America and Citi created for themselves by instigating debit card fees. The $750 million-asset bank is offering to pay people $5 per month to open a checking account instead of charging for debit transactions. In just a couple of days, it’s become the most successful promotion in the bank’s two-year history, and the institution partly has the bad mood of consumers to thank. “We’ve gotten dozens of account openings per day,” says Trevor Burgess, CEO of the bank holding company, which introduced the $5 reward program on Tuesday.
- Why Banks Must Support All Mobile Platforms and Why HTML5 Matters
Building all mobile apps from the same platform has the advantage of freeing up developers who were formerly dedicated to specific native and browser apps and it eases and accelerates the process of adding a new feature, such as remote deposit capture, across the board. The downside, Dennes acknowledged, is that it’s hard to create unique offerings on new platforms. For instance, Huntington’s forthcoming iPad app, which the bank plans to launch next week, is essentially the iPhone app retooled for the tablet.
- Pressures grow on US regional lenders
Large US regional banks will need to cut expenses by up to 40 per cent to cope with slower economic growth, lower revenues and high regulatory costs, and that will increase pressure to cut staff or merge with rivals, a new study says. The report by Alvarez & Marsal turnround specialists said returns on equity at leading regional US lenders had fallen by about half from pre-crisis levels of about 15 per cent. Luring investors back to the sector would require more than routine cost-cutting, it said. Seamus McMahon, a senior adviser at the firm, said: “There is no way to take 30 to 40 per cent of costs out of an existing business system”.
- Would banking customers rather gripe than switch?
The anger over bank fees – and Bank of America’s planned $5 debit fee in particular – is creating two vexing questions for the banking industry. First, will people really switch banks? Second, if they do decide to switch to a community bank or credit union, could they successfully open and fund an account – and disentangle themselves from the bank they’re leaving? The answer to the second question is detailed in a report Javelin released to subscribers Friday.
- Best of BAI Retail Delivery 2011
BAI held its giant banktech trade show, Retail Delivery, in its hometown this year, the first time it’s been held in Chicago since Jim Bruene began attending in 1993. It was a good year for announcing interesting FI partnerships: PayPal and USAA for mobile P2P payments, Cardlytics and PNC for merchant-funded rewards, On Deck Capital and US Bank for small business alternative lending. Best mobile positioning statement (tie): In back-to-back, but separate sessions, Neff Hudson, USAA and Brett King, Bank 2.0/Movenbank said almost the same thing: that banking has always been a destination (visit branch, call the VRU, or login in to online banking). And with mobile, banking goes direct to the customer.
- Banks Start To Make More Loans
Despite all the bleak economic news, a funny thing has been happening in the financial industry over the last few months: the banks have quietly turned on the lending spigot. Loan growth is still modest. And it remains heavily weighted toward the strongest corporate and consumer borrowers. But after several quarters of having their loan balances plunge or flatten out, several of the nation’s biggest banks are reporting increases.
- NCR, S1, PayPal To Offer Money-Transfer Service Via ATMs
Automated-teller machine maker NCR Corp. (NCR) has partnered with eBay Inc.’s (EBAY) PayPal and the e-commerce company S1 Corp. (SONE) to offer person-to-person payments via ATMs. The service will allow people to transfer money to the recipient’s PayPal account with an ATM, an option that could be less expensive than other money-transfer options currently available. An NCR spokesman said it will sell licenses to banks running on the S1 payment platform and using NCR’s Aptra Edge in the U.S.