Tag: Product Design

How To Properly Price and Structure An Extendable Commercial Loan

Extendable Loan Products

In the attempt to win more business, banks sometimes offer what is commonly referred to as an “extendable,” “flex,” or “structural flex” commercial loan in order to give the borrower more flexibility. The option allows a borrower to move out their maturity date and allows more flexibility. While this structure is a popular way to win business, some banks may be inadvertently increasing their credit risk. In this article, we review the structure and look at the right, and wrong way to structure the extendable loan.


Why Doesn’t Your Bank Have A Non-Spouse Account?

This week, Simple, a division of BBVA Compass, launched a non-spouse account and many banks across the industry wondered why they don’t have a similar offering. The answer to why more banks don’t have a non-spouse account is because of tradition. Bankers for decades either never paid attention to demand or never stop to question the current state of affairs of account opening and structuring.

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.

What Alerts Do For Bank Products

When designing products, choosing vendors or trying to solve usage challenges, understanding the importance of alerts and notifications is critical to success. Alerts are important now and will be even more essential for the modern banker to understand in the future as banking morphs into a collection of mobile apps and wearables.

Bank Account Opening Is A Problem - How One Bank Fixed It

Bank Account Opening

Every bank should send their new employees out and mystery shop at least one other competitor and report back. Further, every senior manager should do the same once per year. If they did that, most banks would find that the account opening process leaves much to be desired and the act of mystery shopping would create a desire to improve. Most banks don’t improve because their customers put up with the opening process so no one realizes that something is wrong. But, something is wrong. As an industry, our account opening process leaves much to be desired.

How Banks Can Use Exclusivity For Customer Engagement

Using Status and Exclusivity in Bank Marketing

As we look ahead for 2016, we are noticing that there are some key trends emerging in financial services that banks can take advantage of. As the economy strengthens, the confirming of status is emerging as a key motivator and can be used by banks to drive behavior. We first reported on this trend when we discussed turning your bank into a night club and today we talk about the application of exclusivity at the customer level. The major shift here is that instead of banks accepting all customers, this trend is all about having customers prove themselves to the bank.

BankUnited’s New Checking Account Is Sending A Message

High interest checking

BankUnited recently released their Vertical Rewards Checking Account and in doing so has sent a message to other bankers that the war for deposits will be fought not with certificates of deposit (CDs) or money market accounts, but with checking. Bankers should take notice because while you may not compete with BankUnited like we do, this product may be coming to your market. Even if it doesn’t make it to your footprint, it is important to understand how this product works and performs as it will likely shift the strategy of raising deposits going forward.

Should You Add A Prize-Linked Savings Account?

Prize Linked Deposit Accounts

Long an issue of banks and public policy is the fact that more than half of American’s under save and 25% of households have no material savings at all. Yet, Americans spend more than $70B annually on various lotteries. The crossroads of that fact set is the reason why Congress passed legislation that in December of 2014 allows banks and credit unions to offer accounts that are eligible for randomly selected “savings promotion raffles” so long as their state of domicile doesn’t prohibit it.


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