|By Jim Bruene on October 30, 2012 3:21 PM | Comments|
I've been wanting to write about overdraft protection for more than five years. It's a $30 billion market (note 1) with a number of serious issues, but I wasn't quite sure how it fit our mission of identifying opportunities in online and mobile banking. I finally realized the always-on digital connection to the customer fundamentally changes the overdraft equation.
In the pre-digital age, a "bad check" was a labor-intensive process. Manually handling the item with slow snail-mail and/or phone calls to the customer was a hassle and a significant cost. The $8 NSF/OD fee in place when I started in banking (late 1980s) barely covered the variable costs, and certainly wasn't a major profit center.
Fast-forward 25 years. With sophisticated balance forecasting ala Simple (note 3), real-time debit authorizations, and virtually free instant customer communications, not to mention a hostile political environment, the days of $30+ penalty fees are numbered.
The transition will not be an easy one for banks. But there are ways to create customer-friendly overdraft-protection services, primarily delivered digitally, that win back a good portion of the lost revenue while making customers MUCH, MUCH more satisfied.
Our new 36-page report includes:
- 25 promising overdraft-protection enhancements for the digital age
- Pricing overdrafts and overdraft-protection services
- Gallery of overdraft-protection websites at banks and credit unions
- Profile: Bank of Internet's OD-free checking account
- Size of the U.S. market for overdrafts
About the report
Digital Overdraft Protection (link)
Making it a customer benefit again
Author: Jim Bruene, Editor & Founder
Published: 29 October 2012
Length: 36 pages, 12 tables, 7,600 words
Cost: No extra charge to OBR subscribers, US$395 for others here
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