By Mark Roe, National Director
As consumers demand more speed and convenience when transacting their financial business there is no doubt you face the challenge of how to effectively meet changing service demands and remain viable. On the one hand, if you don’t offer the same level of mobility and product diversity as your competition, your profitability will suffer. But simply implementing every new product or technology won’t necessarily address the preferences of your account holders...nor will it have the best impact on your bottom line.
Are you really getting into details tied to your performance to see actual improvement?
You may already benefit from taking periodic measurements of your ratios and trends on a monthly, quarterly and annual basis – or when you’re involved in strategic planning initiatives. But do you have a realistic view of what those ratios are telling you? How cost-effective and practical are your products and services? Are they providing optimal value for your institution and your account holders?
By reviewing all of the data, you can uncover the information necessary – through such tools as predictive analytics – to determine how product and service offerings can provide true benefit best meet the needs of your account holders. For instance, if a business account holder is conducting a high volume of business through a regular checking account, there could be a missed opportunity for service charge revenue. At the same time, the account holder could be missing out on access to ancillary services that would be valuable for running their business.
Likewise, account holders who frequently overdraw their account and experience a high number of returned check fees could benefit from the financial peace of mind provided by a fully disclosed overdraft program. And the resulting fees for offering a service could provide much needed income for the bank or credit union.
Realize your income potential
In today’s business environment, you can’t be successful by doing business the way you have always done it. The more information you have about how to increase your product profitability, the better equipped you will be to stand up to the competition.
A product profitability study
is an effective tool that examines your products to make sure they are providing the most benefit for your institution. For instance, debit card income is generally either the first or second largest non-interest income opportunity. And while an increase in this line item does not impact your account holders, it can provide a healthy boost to your bottom line.
Identify products that most closely align with account holder needs and boost revenue
Having a strong focus on account holder interaction can result in a win-win situation. The time your account service representatives spend getting to know the kinds of services really needed can help you avoid the tendency to add every new product that comes down the pike and re-enforces your commitment to truly personalized service.
Most organizations are not able to clearly see where there may be income opportunities or profit leaks. Partnering with an expert to conduct a study related to account holders and product profitability will help to identify and implement changes in your product mix that can result in achieving better results.
For more information about reducing expenses contact us or call 800-809-2307.