Choice Checking Generating Vital Non-Interest Income for Community Banks and Credit Unions

AUSTIN, Texas, June 7, 2011 /PRNewswire/ -- BancVue, the leading provider of innovative products, dynamic marketing, and data-driven consulting solutions to nearly 1,300 community banks and credit unions around the country, today reported the results of two case studies on its Choice Checking™ product.  

BancVue specifically designed Choice Checking to help generate non-interest income and offset the impact of regulatory change.

According to data from the two community financial institutions studied, the innovative BancVue product proved successful in achieving its goal of boosting profitability without increasing accountholder attrition. Both institutions utilized BancVue's Executive Consultants to model different product designs and launch a product to maximize both profitability and market appeal in their respective communities.

Study #1

Following declines in demand deposit account profitability, executives at The First National Bank of Beeville, a$223 million dollar community bank in Texas, opted last September to convert more than 2,500 free checking accounts to Choice Checking with a $4.95 monthly service fee. The fee could be reduced by $1.50 for accepting eStatements and by $0.15 for each debit purchase over $5.00.

In the four months following the conversion, FNB reported that:

• A small percentage of accounts--less than 3%--were closed due to the addition of a fee,
• The 38% increase in per account profitability more than compensated for any attrition,
• The conversion proved to be an opportune time for the bank to proactively purge unprofitable accounts, and
• More than a third of newly opened accounts have been Choice Checking.

"We're altogether pleased with our decision to launch Choice Checking," said Mike Marshall, executive vice president of The First National Bank of Beeville. "The benefits have been many and the costs have been comparatively few. Choice Checking is a choice we would easily make again."

Study #2

Looking to offset losses in NSF revenue due to changes in Reg E and to hedge against future regulatory impact, this $1.5 billion community institution based in the Southeast converted almost 12,000 free checking accounts to Choice Checking with a $5 monthly fee. The fee could be reduced by $1 for accepting eStatements and by $0.25 for each debit card purchase. To maximize acceptance, the bank coupled the account with benefits, including ID fraud protections and merchant discounts. In the three months following the conversion, executives reported that:

• Customer attrition was essentially unchanged,
• Per account profitability nearly tripled and profits increased by $443,000 per year,
• The bank eliminated 1,500 inactive and unprofitable accounts, and
• 46% of newly opened accounts were Choice Checking.

Putting the Banks in Control

Unlike anything the megabanks are offering, Choice Checking counteracts NSF and interchange losses by developing new ways to generate non-interest income and providing consumers with attractive rewards. By incentivizing accountholders to adopt lower-cost-to-serve behaviors, such as eStatements or debit card usage, institutions can still afford to offer value-added accounts at little to no cost for consumers.

To assure each institution establishes the right combination of account structure and account holder rewards, BancVue's dedicated Executive Consultants help determine the optimal starting account fee, fee reduction schedule, and account rewards, all of which are critical to generating market appeal.

"These studies confirm what we always knew," said Gabriel Krajicek, chief executive officer of BancVue. "For virtually everyone, a controllable monthly fee on an account providing valuable benefits is not sufficient reason to leave a relationship built upon years of great service. And, our clients are earning the non-interest income they need to thrive."

The full Choice Checking Case Studies are available at www.BancVue.com.

About BancVue

BancVue is the leading provider of innovative products, world-class marketing, and data-driven consulting solutions to community financial institutions across the U.S. Featuring offerings like Kasasa®, a national brand of superior products and marketing scale, BancVue products are designed to deliver controlled new account growth, higher profitability, and increased customer retention. Today serving nearly 1300 community banks and credit unions around the country, BancVue is empowering its clients to compete in and win the war against megabanks. For more information on BancVue, visit www.bancvue.com.

Contact Information:
Dan Mahoney
970-405-8060
[email protected]
www.csg-pr.com

SOURCE BancVue

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