your 2017 goals include increasing revenues and account holder satisfaction, a fully-disclosed overdraft protection plan may be the solution. A proven plan could fill not only both needs, but also provides fairness, convenience and compliance to the account holder and the financial institution.
Overdraft protection exists primarily to solve a common problem: a cash shortfall when a consumer faces a have or have-not purchase decision. By utilizing the service, consumers can answer a pressing situation in exchange for a manageable expense – one that’s often remedied within days – and your bank or credit union can increase income from a non-interest category. If you’re considering adding or adapting an overdraft protection service, let the attributes of fairness, convenience and compliance guide you to a win-win decision.
Fairness is rooted in value, and as it applies to overdraft protection, begins with how the service is initially presented.
Consumers should expect a fair program to be one that:
The convenience of overdraft protection applies to both the consumer and the financial institution. For the consumer, that can mean the ease of a standard transaction; the confidence of not needing additional arrangements or alternate, sometimes prohibitively-priced resources; and the discretion between only themselves and your bank or credit union.
Convenience for the institution can be:
Given the nature of the industry, compliance is non-negotiable. For financial institutions that implement an internal overdraft protection program, compliance can become lax due to turnover or not keeping pace with industry changes.
Compliance is an ongoing process resulting from:
Given the pace of everyday life and the growing prevalence of electronic banking – studies have shown debit cards represent the largest volume of non-cash payments – an effective overdraft protection service can benefit consumers and financial institutions alike. Consumers can more easily and discreetly resolve unforeseen situations, and you can both earn – and learn – more from account holders. For such a program to benefit both parties, consider how a program can meet the thresholds of consumer fairness, institutional convenience and industry compliance.