Weekly Term Accounts APY Spread and Index–Nov. 4

by tom 4. November 2013 17:02

American Banker and Market Rates Insight feature a weekly APY Spread and Premium indices to provide pricing executives with greater insight into national pricing trends and practices.
 
APY Spread Index
The APY spread is a simplified form of a standard deviation. It measures the variance between the high and low ends of the price range to the average, which indicates whether the APY of a particular CD is closer to the low or the high end of the pricing spectrum.

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Premium Index
Premiums are used as the main vehicle to drive balances towards the most desired deposit products, and are an indication of the capital strategy of each individual institution. This week’s highest and lowest national premiums:
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Mobile Banking Levels the Playing Field for Customer Loyalty

by tom 31. October 2013 15:40

Consumers clearly demand more convenience from their banks and credit unions, and mobile banking is the one category where the smaller banks are challenging their big league competitors: 

When it comes to mobile banking, “There’s no one bank who really hit the ball out of the park,” said Dan Latimore, senior vice president in the banking group at research and consulting firm Celent. [as quoted in the current issue of Bank Director]

The majority of banks seem to be trying to woo new customers with the convenience factor, using free mobile banking as a draw. The plan is to use mobile banking to save on in-branch overhead, and the hope is that smartphone owners are a better class of banking customer.

But these days, the novelty of mobile banking has worn off. Banks of any size can offer convenient mobile banking services such as remote deposit, bill pay, and even peer-to-peer transactions, so basic mobile banking is no longer a market differentiator. Being able to check your balance, move money, and do basic banking from your phone are the just price of entry these days, What will distinguish the true innovators are extending mobile support to additional banking services, such as loan qualification.

In the same Bank Director article, Latimore notes that bankers have to remember that, branch or no branch, customers want service and banking is merely a means to an end. In the case of a loan, for example, consumers don’t want to have to necessarily execute a loan online, but they want a fast “thumbs up/thumbs down” decision ad to whether they qualify for a new car, a home improvement loan, or a mortgage. The banks that determine how to extend relationship banking to the smartphone will have a clear leg up on their competition, no matter how big they are. For example, the new “Chase My New Home” app allows users to search and rate home and calculate mortgage payments, and even though they can’t use the app to apply for a mortgage, Chase reports that one third of users are more likely to pursue a mortgage with Chase.

And while convenience may be a motivating factor in where people bank, the question remains, will consumers pay for mobile banking convenience? Can banks recoup their mobile banking costs and maybe even make a profit through fees? Although the consensus is that basic mobile banking, such as checking your bank balance, will probably remain free, there is an opportunity to charge more for services that customers consider value-added. U.S. Bank, for example, charges $0.50 per transaction for remote deposit. Our research shows that consumers will pay up to $2.60 per month for mobile deposit and on average $2.50 per month for mobile photo bill pay.

Where customer service is the name of the game, and consumers see more value in emerging services such as mobile banking and this is where community banks can take the lead. Quoting our own Senior Vice President, Dr. Dan Geller:

“For the first time in banking history smaller banks have the same opportunity to service their customers to the same degree that bigger banks do…”

Innovation that drives customer service will be the key to ongoing success, and no bank can corner the market on innovation.

Weekly Term Accounts APY Spread and Index– Oct. 28

by tom 28. October 2013 15:59

American Banker and Market Rates Insight feature a weekly APY Spread and Premium indices to provide pricing executives with greater insight into national pricing trends and practices.
 
APY Spread Index
The APY spread is a simplified form of a standard deviation. It measures the variance between the high and low ends of the price range to the average, which indicates whether the APY of a particular CD is closer to the low or the high end of the pricing spectrum.

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Premium Index
Premiums are used as the main vehicle to drive balances towards the most desired deposit products, and are an indication of the capital strategy of each individual institution. This week’s highest and lowest national premiums:

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Banking Trends | CD Balances | Market Research | Deposit Products

Walgreen Debit Card Designed to Appeal to Consumer Dissatisfaction with Traditional ATM Fees

by tom 25. October 2013 15:07

It seems Walgreens is the latest to enter the prepaid debit card arena with Balance Financial, its own cash card alternative announced earlier this month. The drugstore chain announced it was introducing its new prepaid debit card in all of its 8.541 locations, including its Duane Reade stores. Unlike other reloadable cards, this new card allows you to make online bill payments, cash checks and directly deposit paychecks. And it only costs $2.95 to sign up, with free ATM withdrawals in the drug store and a $2.95 transaction fee at other ATMs. And users gain points toward discounts and other rewards.

imageThis is the latest bank-like product to come from a retailer rather  than a financial institution. In the past we have blogged about American Express’s Bluebird and its deal with Wal-Mart. Even Occupy Wall Street has gotten into the act with its own Occupy Money Cooperative card.

This growing trend seems to point beyond servicing the underbanked; it’s also about providing a service to the “unhappily banked.” Traditional banking fees and emerging fees that banks and credit unions are imposing to try to recoup declining profits is fueling consumer backlash; if consumers see a good deal on a prepaid card that offers easy use and free perks, they’ll take it. In commenting on the rollout of Bluebird at Wal-Mart, former Wal-Mart CEO H. Lee Scott noted:

“The next generation of Wal-Mart leadership looked at this program and began to focus on not just the underbanked but also the “unhappily banked.” That is, a person who historically utilized free checking and the services that went along with free checking, and now has to pay more as free checking is phased out at most banks. So, Wal-Mart leadership looked for a product that avoids ATM fees and costs very little in other fees if customers use direct deposit.”

For consumers, prepaid debit cards are a means to bypass banks and credit unions altogether. They get the convenience of their ATM card without hidden fees or hassles, and with added convenience since you tend to shop at those retailers anyway. Some say retailers may actually take the place of conventional banks.

In fact, the British have already paved the way in this area. Sainsbury’s and Marks and Spencer have forged strategic alliances with banks offering everything from mortgages to insurance. Of course, there are bank branches in your local Safeway but they are still understood to be branches.

What’s the solution for banks and credit unions? Fight the retailers at their own game by offering greater convenience and offering products that increase consumer satisfaction. Rather than imposing fees for services that consumers can readily get elsewhere, offer other incentives to increase revenues while reducing and eliminating fees that consumers find distasteful.

It also pays to remind consumers that prepaid bank cards aren’t tracked by the credit bureaus, so they don’t help your credit rating. The more consumers rely on prepaid cards, the harder it could be to qualify for a car loan or a mortgage.

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Weekly Term Accounts APY Spread and Index–Oct. 21

by tom 24. October 2013 10:35

American Banker and Market Rates Insight feature a weekly APY Spread and Premium indices to provide pricing executives with greater insight into national pricing trends and practices.
 
APY Spread Index
The APY spread is a simplified form of a standard deviation. It measures the variance between the high and low ends of the price range to the average, which indicates whether the APY of a particular CD is closer to the low or the high end of the pricing spectrum.

image

Premium Index
Premiums are used as the main vehicle to drive balances towards the most desired deposit products, and are an indication of the capital strategy of each individual institution. This week’s highest and lowest national premiums:

image

Weekly Term Accounts APY Spread and Index–Oct. 15

by tom 15. October 2013 16:14

American Banker and Market Rates Insight feature a weekly APY Spread and Premium indices to provide pricing executives with greater insight into national pricing trends and practices.
 
APY Spread Index
The APY spread is a simplified form of a standard deviation. It measures the variance between the high and low ends of the price range to the average, which indicates whether the APY of a particular CD is closer to the low or the high end of the pricing spectrum.
image

Premium Index
Premiums are used as the main vehicle to drive balances towards the most desired deposit products, and are an indication of the capital strategy of each individual institution. This week’s highest and lowest national premiums:

image

Prepaid Cards Now Offer More Competition With New Savings Options

by tom 10. October 2013 16:52

A variety of companies that do not qualify as banks or credit unions have started to offer prepaid debit cards. American Express announced a new deal with Wal-Mart this week that will give low-income customers access to the American Express Bluebird card, which means low-income customers can have access to credit card features like smartphone deposits, mobile banking, and roadside assistance.

Bluebird has gotten some close scrutiny from financial rivals but it’s gaining popularity with consumers. The consumer watchdog organization, the Consumer Financial Protection Bureau, is preparing restrictions on prepaid cards and says it has concerns about high fees and less than adequate disclosures.

While products like Bluebird clearly compete with conventional checking accounts and ATM cards, other new prepaid products are emerging to take on other banking sectors. Social Money, a start-up developing white-labeled products, has just announced CorePro, an FDIC-insured pre-paid card product that integrates savings with online and mobile solutions.

CorePro is similar to Social Money’s online savings system, SmartyPig, with savings goals and goal imagemanagement. This is an API-driven account that helps consumers save and costs issuers $0.39 per month per account.

What makes this approach different from conventional prepaid cards is the savings component. These kinds of savings accounts have been criticized in the past because they are difficult to manage, difficult to maintain, and they are closely scrutinized by regulators. Smart Money is addressing those concerns by offering these cards through merchants, payroll companies, and other groups with a simple pricing model. For example, merchants can use the card in conjunction with a wish list or layaway plan.

To help simplify complexity issues, Social Money will take on bank affiliation, core processing, interest accruals, interest payments, 1099 processing, and account opening for customers. They also claim that CorePro will cost one-quarter of other savings solutions.

So does this mean consumers are going to flock to products like CorePro and ditch their savings accounts? Probably not, but it will make pre-paid cards powered by CorePro look more attractive to consumers.

What’s your take on pre-paid debit cards? Are they a threat to conventional banking products or just another product in the mix? We’d love to hear your thoughts.

Weekly Term Accounts APY Spread and Index–Oct. 7

by tom 7. October 2013 16:27

American Banker and Market Rates Insight feature a weekly APY Spread and Premium indices to provide pricing executives with greater insight into national pricing trends and practices.
 
APY Spread Index
The APY spread is a simplified form of a standard deviation. It measures the variance between the high and low ends of the price range to the average, which indicates whether the APY of a particular CD is closer to the low or the high end of the pricing spectrum.

image

Premium Index
Premiums are used as the main vehicle to drive balances towards the most desired deposit products, and are an indication of the capital strategy of each individual institution. This week’s highest and lowest national premiums:

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New Occupy Movement Prepaid Bank Card–“If You Can’t Beat ‘Em…”

by tom 3. October 2013 11:37

This week the Occupy Wall Street movement announced that they are coming out with their own prepaid debit card, which seems ironic. When you look at the structure of the debit card, it looks a lot like any other bank card:File:Occupy PDX Anonymous.jpg

  • A $1 monthly fee
  • $1.95 per ATM transaction
  • $1 fee for balance inquiries.

The debit card is being backed by Visa, but is designed to raise money for the Occupy Money Cooperative (OMC). Occupy’s promise is that a larger percentage of the revenue is flowing into the OMC than into Visa. This is the Occupy movement’s attend to combat the larger Wall Street banks with a nonprofit banking services cooperative that will eventually offer a complete line of financial services – checking, loans, and financial education. The difference is that it will be controlled by “users” not shareholders.

In speaking to Forbes, Carne Ross, director and founder of Independent Diplomat, an advisory group, and a member of the alternative banking working group established by Occupy’s General Assembly, said:

“We launched [the Occupy Money Cooperative] because we felt that the way the for-profit banking industry operates in the U.S., it intrinsically exposes the U.S. economy to risk and makes us vulnerable to the consequences but, above all, fails many millions of Americans who don’t have bank accounts and are denied banking services.”

Although this sounds a lot like a credit union, this is going to be a democratically owned organization that is open to everyone, not just a specific member group. Once the fund raises $900,000 anyone who wants to join can do so through the organization’s website.

Will this have an impact on banks and credit unions? It’s too early to say, but it’s another indication that consumers aren’t getting what they want from today’s financial institutions.

Weekly Term Accounts APY Spread and Index–Sept. 30

by tom 30. September 2013 17:01

American Banker and Market Rates Insight feature a weekly APY Spread and Premium indices to provide pricing executives with greater insight into national pricing trends and practices.

APY Spread Index
The APY spread is a simplified form of a standard deviation. It measures the variance between the high and low ends of the price range to the average, which indicates whether the APY of a particular CD is closer to the low or the high end of the pricing spectrum.

image

Premium Index
Premiums are used as the main vehicle to drive balances towards the most desired deposit products, and are an indication of the capital strategy of each individual institution. This week’s highest and lowest national premiums:

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