By John M. Floyd, Chairman and CEO
As many consumers continue to face challenges regarding their financial security, unexpected situations like the recent government shutdown highlight the fact that financial setbacks can occur at any time. According to a survey released by Bankrate.com, nearly three-quarters of Americans are living paycheck-to-paycheck, with little to no emergency savings. Fewer than one in four surveyed had enough of a cushion to cover unexpected medical expenses or other emergencies.
Going into the holiday season can make this situation even more precarious for some as impulse buying and unexpected expenditures can lead to account shortfalls.
And while some may view the frequent tendency to overdraw a checking account as a lack of financial sophistication or even lack of judgment, it is important to remember that many Americans struggle with managing their finances. Without safe, basic financial services, many consumers are forced to turn to more costly, often unregulated sources.
To assist with consumer needs, easy-to-understand products that are available as a resource – such as a fully transparent overdraft program – can help account holders maintain financial stability and reinforce the value your financial institution can provide.
A fully disclosed overdraft program that clearly defines the rules by which an account holder may access an overdraft service establishes a straightforward approach of responsible use. Plus, such programs give account holders a reliable tool for maintaining control of their money and help them to avoid less attractive choices of meeting their liquidity needs, such as resorting to high interest rate credit cards or payday lenders.
There is currently much discussion about the importance of providing consumers with the products and services they want and need to conduct their financial business. And while much attention is focused on the latest technology involving mobile capabilities, it is also important to make sure you are providing your account holders with access to basic, fully transparent services that help them meet their financial obligations with no surprise fees or undisclosed rules. In the end, providing value to your account holders contributes to loyalty, which translates to continued growth for your organization.