Gen Y Hard Hit By Recession But Youthfully Optimistic

Community Banks and Credit Unions are doubling down on their efforts to grow the proportion of Gen Y in their customer base.  We find this strategy puzzling given the mountains of data that suggests Community Banks and Credit Unions should focus on the affluent (read here and here), rather than investing resources on Gen Y which is likely to results in negative ROI (read here and here). Yet another data point comes from Pew Research Center that notes that Gen Y has been hard hit by the recession and the profound changes in the employment realities.  Their February 2012 survey entitled Young, Underemployed and Optimistic provides important insights to businesses that believe that their near-term (next 3 – 5 years) growth and profitability are dependent on Gen Y. Optimism Just 31% of Gen Y say that they earn / have enough to have the kind of life that they want, [Read More...]

Payments Offer a Unique Opportunity for Community Banks and Credit Unions to Compete and Win

Financial Institutions – particularly Community Banks and Credit Unions – continue to face significant margin pressure, especially post Reg E and Durbin.  Boston Consulting Group (BCG) analysis predicts that Banks can expect a 2% decrease in annual revenues while transaction volumes will increase 9% annually over the next 10 years.  McKinsey & Co predicts that Durbin will result in as much as 50% margin erosion, and Oliver Wyman’s 2011 study shows that Reg E has already resulted in a 45% reduction in income, even for Banks not subject to Durbin. Louis Blatt, SVP of ACI Worldwide, in a BankNews article notes that explosion in demand for payments from Consumers and Small Businesses can be a boom for Community Banks and Credit Unions.  Digital payments offer Financial Institutions (FIs) the opportunity to compete against new entrants (such as PayPal, Square, Isis and others) who are already causing significant market disruption and applying [Read More...]

Will the bank Branch Ever Return to Profitability?

Are Branches an effective and efficient distribution, sales & service channel? A recent FIS white paper suggests the answer may be ‘No’.

What's in Dodd-Frank from ICBA

Title by Title Overview of What’s in Dodd-Frank courtesy of ICBA.   ————————————————————— —————————————————————-

Branchless Banking – Fantasy or Reality?

Some say branchless banking is never going to happen, yet there are hundreds of large and small Banks and Credit Unions that are living examples of “never”.