Tax Refunds: Are you helping your customers spend it wisely?

Piggy Bank

Now that Tax Day is upon us and refunds are trickling in, your customers and members are being provided with new funds. But whether they spend, invest or save, are you guiding them to make the wisest decision?

Christopher McGill, president and CEO of East River Bank  in Philadelphia, PA has a few recommendations for his customers on how to use their refund dollars.

While the smartest decision is to obviously pay off a prior debt or invest that refund, spending – even just a portion of it – on a smart purchase is actually advisable, according to Christopher.

Rule of Thirds

Christopher always recommends the “rule of thirds” when upon receiving an unexpected amount of income. Divide the refund into thirds and put one portion towards a credit card bill or other debt, another third into savings and investment, such as an IRA and the final amount towards something for you.

Save More Money

However, instead of spending it on something frivolous like a trendy handbag or new set of golf clubs, consider splurging on a purchase that could actually save you money over time. Examples include an espresso maker (much cheaper than a daily trip to Starbucks), a bicycle (a healthier and more affordable means of transportation) or a high efficiency appliance, which can help you save loads on energy costs.

Invest in Yourself

Another smart splurge is investing in your career by furthering your education. Use part of your refund to take some continuing studies courses to sharpen your skills and better your chances for that promotion and, hopefully, salary increase.

Spend Selflessly

Finally, for the most selfless purchase of all, consider this the time to get some life insurance. If you have a spouse or children who depend on your income, invest in their financial security and your own peace of mind. While it might seem depressing, spending a few hundred dollars a year to create an insurance protection fund for your family is something definitely worth considering.

What advice are you giving your customers and members?

 

Tax Time & Financial Institutions: Data from Digital Insight

The tax filing deadline is rapidly approaching, and for many consumers that means looking through last year’s financial records for various items like charitable contributions or tax deductions. Digital Insight, which offers TurboTax ® for Online Banking to its financial institution (FI) customers, took a deep dive into how consumers are using tax software and how it can benefit FI’s. Through tax exit studies and surveys, Digital Insight was able to see how the tax preparation software helps FI’s with customer engagement and retention. Below are key findings from the study, and you can view a more in-depth analysis here.

And, you can view previous Digital Insight studies on mobile banking behavior and online banking. 

Intuit, TurboTax and TurboTax Online, among others, are registered trademarks and/or service marks of Intuit Inc. in the United States and other countries. Other parties’ trademarks or service marks are the property of their respective owners.

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What We’re Reading: Holiday Edition!

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.

  • If Economists Wrote Christmas Cards

The Atlantic

Cash is the most efficient gift, according to economists. Cash is also a terrible gift, according to economists. By guaranteeing that the recipient can buy exactly what she wants, you guarantee that the recipient will consider you an unemotional robot. That’s why the vast majority of economists in the University of Chicago’s IGM poll said it’s absurd to give cash to loved ones for the holidays. “In some cases,” Steven Kaplan said, in a stirring defense for thoughtful gifts, “non-pecuniary [not cash-related] values are important.”

Read more 

  • 2014 Top 10 Retail Banking Trends and Predictions

Bank Marketing Strategy

This year’s list run the gamut from a continuation of past trends to the introduction of new trends in delivery, payments, competition, operations, customer experience and marketing. Prioritization of response to these trends will differ for each bank, credit union and industry provider, but none of these trends can be ignored.

Read more 

  • Is 2014 the Year of Mobile Banking?

Bank Systems and Technology

Here are the top three predictions on what to expect in mobile banking 2014. Mobile Deposit Will Move Beyond the Consumer to Commercial. Photo Bill Pay Adoption Wiill Be Steeper and Faster than Mobile Deposit. Mobile Banking Adoption Will Catch Up to Smart Phone Adoption.   It is looking like 2014 will be the year that the human element of mobile banking finally catches up with the technology.

Read more 

  • 4 New Year’s Resolutions for Your Bank Accounts

FOX Business

Here are four things you should do in the new year to get your banking situation into better shape: 1. Optimize your checking/saving balance. 2. Move deposits longer — with caution.  3. Consider a shorter-term mortgage.  4. Re-prioritize your banking needs

Read more 

  •  IRS Reveals How Long 2014 Tax Filing Season Will Be Delayed

My Bank Tracker

A couple of months ago My Bank Tracker informed us that the government shutdown would delay the 2014 tax season, and that the actual length of the delay would be announced at a later date. The IRS announced yesterday that processing for the 2014 tax-filing season would be delayed until Jan. 31.

Read more 

  • 3 ways banks will try to win you back in 2014

Yahoo! Finance

Here are just a few ways banking will get a lot sweeter in 2014: 1. They’re bringing the bank teller to you: Bank of America (BAC) raised eyebrows when it rolled out 150 teller-assisted ATM machines earlier this year, and we can expect to see more banks follow suit. Expect perks on perks on perks: Consumers, no matter the size of their checking accounts, can expect more “star” treatment from banks in 2014.  Banks will take on the classroom: In 2014, you can bet big banks will continue their uphill battle to redeem themselves by focusing on consumer education.

Read more 

What We’re Reading: Retail Banking, Tech Disruptions and Vine

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.

 

  • ‘Consumer Reports’ Offers Tips For Doing Taxes Online

All Things Considered

If you expect to have an adjusted gross income of $57,000 or less, the easiest thing to do is use the IRS website — it has a section called Free File. You can prepare and file your federal income taxes for free with one of 15 companies that have signed up with Free File. If you think you’re going to have an adjusted gross income that’s greater than that, you can use the search engine, type in “tax preparation,” and a number of names should come up. One that everybody might know is TurboTax.

Read more

  • Big Bank Breakups and Tech Disruptions: Predicting the Future of Reform

American Banker

Almost everyone in Washington finds some fault with Dodd-Frank. But rather than making smaller, incremental corrections in the short term, Congress could attempt a more comprehensive fix further down the road. To many, Dodd-Frank, which is meant to apply more regulatory pressure on the largest financial companies, tried correcting problems with Gramm-Leach-Bliley, which made it easier for multiline financial conglomerates to operate. Alternatively, the rush of technological change in financial services could serve as motivation to lawmakers to devise regulatory reforms that keep pace.

Read more

  • Social Media Newbie Regions Bank Aces Facebook, Considers Vine

Bank Investment Consultant

Looking further ahead, Liliana Grip, vice president of social media at Regions Bank has her eye on Vine, a Twitter-owned mobile service that lets users capture and share short looping videos. “We’re trying to figure out how to leverage Vine[…]One concern, and Twitter is addressing this, is there’s a lot of [content] that isn’t consistent with our brand. We need to get through some legal and compliance hurdles.”

Read more

  • Consumer Appetite for Comprehensive, Mobile PFM Grows

Bank Systems & Technology

Javelin estimates only 21 percent of U.S. consumers — or more than 49 million adults — mix and match current PFM features from software like Quicken, online banking, and various websites. However, many of those polled indicated that they wold like a way to view all their account balances in one place, with nearly half prioritizing this feature over all the other PFM services.

Read more

  • What Will Retail Banking Look Like in 2020?

Bank Systems & Technology

Opening a new bank branch used to be a matter of simply choosing a location and building out the structure according to a template design. But today, the definition of “bank branch” is being transformed by technology, competitive dynamics and economic pressures. As reported in Jones Lang LaSalle’s recently published Global Retail Banking 2020 study, up to 50 percent of branches in today’s U.S. bank networks may be declared obsolete — although not necessarily defunct — by 2020. Given that branches constitute 75 percent of a bank’s total retail distribution costs, according to research from Capgemini, implementing smart, technologically savvy retail strategies will be critical to driving shareholder value.

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  • Threat of the Week: DDoS Becoming an Expensive Fact of Life

Credit Union Times

The ceasefire is over. Last week, on Feb. 25, the Cyber Fighters of Izz ad-Din al-Qassam renewed their Distributed Denial of Service attacks against U.S. financial institutions. That included again taking down the websites of two credit unions: the $1.5 billion University FCU in Austin, Texas, and Patelco, the $3.8 billion Pleasanton, Calif., institution. They issued the same demand – removal of an anti-Islam video from YouTube – and said their campaign against financial institutions would continue. What is new is that the conversation about how to respond to the industrial-grade DDoS unleashed by the Cyber Fighters is beginning to shift.

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  • Consumers Want More Practical Online Tools, Portable Bank Account Numbers

Financial Brand

According to a study conducted by BT and YouGov, 61% of banking customers in the U.S. favor portable banking account numbers. When asked which three tools they would most like their bank to provide, customers indicated that they would like to see more sophisticated, more practical online tools — all hosted on the financial institution’s main website. The features most desired by consumers include peer review sections (32%), live chat functionality (23%) and compare-my-bank style services (29%). When asked about which three factors would be the most appealing when considering moving banks, the results were fairly consistent across all countries. Good online banking facilities (39%), the presence of a local branch (45%) and the ability to access banking services 24/7 (29%) were ranked highest.

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  • Consumers remain resistant to digital banking aspirations

Finextra

A YouGov poll of consumer attitudes to the introduction of portable bank account numbers has unearthed an underlying distrust of social and mobile technologies and a clear preference for human-to-human interaction via the branch, the call centre and the Web. The BT-commissioned poll of 6500 adults from six countries worldwide, found that the majority of consumers in Spain (76%), Hong Kong (70%), France (64%), Germany (61%) and the UK (62%) all agree that a portable identity number – allowing them to switch banks without changing account details – would be useful.

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  • Five High-Tech Trends Driving the Future of Banking

FOX Business

Here are some of the trends driving the future of banking. Customers will soon be gaining more mobile-banking payment and account options. “We’re going to see a lot more and different products, and a richer (banking) experience,” says Brett King, author of “Bank 3.0″ and “Branch Today, Gone Tomorrow. Banks already are rolling out banking software for iPads and tablets and thinking of new ways to structure bank accounts “that are more purpose-built,” with more options for tracking money and ways to make payments, King says.

Read more