Tag: Cash Management

It Is When, Not If Your Commercial Bank Will Offer Digital Disbursements

Payments and Digital Disbursements

While the eulogy for checks has already been written and cash is starting its demise, the pallbearers are now in place. By our estimation, 14% of banks offer this service and they are starting to reap material rewards. Bank of America, which has offered the product since 2014 is one of the largest beneficiaries and has gathered hundreds of millions in deposit as a result. The rise of real-time processing will only accelerate this move. In this article, we take a look at the benefits and the options for community banks. 

 

Top Secret Commercial Bank Deposit Prospecting Hack Revealed

Selling More Treasury Management

Seasoned bankers call it “The Distributor Tactic” and it is a little-discussed technique used for ages in banking to speed up the sales cycle to land small business deposit and treasury management accounts faster. The key to this tactic is to know that very few commercial checking customers utilize any medium or high-value treasury management services at banks (see below). These low penetration rates present an ideal situation to market your bank’s services and disrupt the competition.

Why Your Bank Should Lead Your Customers To Go Cashless

Cash Management

More and more businesses in the US have stopped taking cash. Unfortunately, this trend is being capitalized on by the likes of Square, Paypal, Visa and others when it should be prime consulting territory for treasury management department at banks. Cash handling usually costs between 5% and 12% of expenses plus slows down the number of processed customers. In places like Sweden, only 20% of the retail shops still take cash, and the US will be following suit.

Marketing Same-Day ACH for Fun, Profit, and Deposits

Same Day ACH

Since September of 2016, bank customers have had access to same-day ACH credits. When same-day ACH was expanded to include debit transactions four months ago, no surprise, the functionality took off. Same-day ACH grew 138% from Q3 to Q4. The funny part is that, despite its proven popularity, few bank are marketing and many customers don’t know that the functionality is available to them. The same banks that complain and worry about competition from fintech disruptors are slow to adopt and market ACH.

Marketing Same-Day ACH for Fun, Profit, and Deposits

Same Day ACH

Since September of 2016, bank customers have had access to same-day ACH credits. When same-day ACH was expanded to include debit transactions four months ago, no surprise, the functionality took off. Same-day ACH grew 138% from Q3 to Q4. The funny part is that, despite its proven popularity, few bank are marketing and many customers don’t know that the functionality is available to them. The same banks that complain and worry about competition from fintech disruptors are slow to adopt and market ACH.

Why Banks Need To Stop Charging RDC Fees

Strategic Pricing

First, let’s get out there that banks need to charge more fees, not less. Generating fees is critical to bank performance. However, as an industry, we need to be sensitive to how we charge fees to incent the right behavior. Remote deposit capture (RDC) fees are a perfect example. Our industry, by charging customers for RDC, inhibits balance building, increases defection, increases operational cost and increases the customer’s reliance on branches – all the opposite of what our goals should be.

Zelle and the Future of Payments for Community Banks

Bank P2P Payments

Person-to-person (P2P) payment service, Zelle, goes live over the next week and is being introduced into the market by more than 30 major financial institutions including Bank of America, Chase, US Bank, Capital One and Wells Fargo. Operated by a bank partnership, the technology will be incorporated into many bank’s online and mobile applications and will displace PayPal’s Venmo, Square Cash and P2P integrations in both Facebook and Apple’s ecosystem.

Why Isn’t Your Bank Selling Loan Sweep?

Fee Income Generation

One of the best predictors of bank performance is the level of fee income. The more fee income a bank has, the more likely they have above average performance. Fee income creates a more stable and less interest rate sensitive revenue stream.  It amazes us how few banks offer a loan sweep (sometimes called an “ALS” or Automated Loan Sweep) where a customer can set their operating account to sweep balances to reduce their borrowings on their line of credit. CenterState Bank offers the product, and this lays out a case of why you may want to consider the product.

How Your Bank Can Win The Treasury Management Battle

Winning treasury management customers at banks

The long-run war for bank supremacy will be fought in many theaters. One of the largest battlefields will be on the pitch of treasury management with many banks in a geographical and customer segment area striving to capture that lucrative corporate customer. Banks going after medical professionals or homeowner associations, for example, already face intense competition. Competition is growing for other highly profitable customers such as hotels, car dealers, distribution companies, insurance companies and manufacturers.

Here Is a Winning Bank Payment Strategy

Bank Payment Strategy

Something might be getting lost in the payment debate among banks. At conferences and publications, most of the information targeted at banks is whether banks should go on Apple Pay or other payment platforms; should a bank get a mobile wallet; and, our favorite, can banks still win the payment game? The answers to those questions are: Yes, banks need to get on Apple Pay and all other payment platforms readily available. Yes, banks should support some mobile wallet in order to get their card in the payment stream.

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