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New regulations and the end of the refi boom are forcing banks to seek new sources of noninterest income. Some are taking a hard look at offering services they can charge for.
November 7 -
Big, flashy rewards are often too broad, too niche, or too complicated for consumers. Banks should follow Capital One's lead and switch to more straightforward (and sustainable) rewards programs.
November 6 -
Mobile banking can alleviate friction and save time for underserved, low-income consumers, but face-to-face interaction is critical to serving their financial needs.
October 29 -
Straightening out bad actors is fine, but it wont resolve the inconsistencies and consumer confusion about overdraft protection cited by the Consumer Financial Protection Bureau.
June 14
Given, you know, the financial crisis, its subsequent bailouts and all the
It's also absurd to suggest financial firms should never charge for a service ever again. Banking is a business, not charity, after all. And, if the industry is to fulfill its broader social functions lending to businesses, prospective homeowners, etc. to bolster the economy revenue remains essential.
Consumers may not like fees, but they do pay them all the time, often without complaint.
Consider, for instance, American Express's Platinum credit card, which
The Platinum card, which is lauded for, among other things, its travel perks and lucrative rewards program, illustrates a golden rule banks should apply to fee services: make sure the customer is getting something of value in an exchange for the payout.
Still, there are a few other strategies banks should incorporate as
For instance, make the charge easily avoidable. ATM fees have escaped the level of scrutiny that
Knowing these options are available precludes someone from raging at the sight of the $6 ATM charge they incurred after using an out-of-network ATM at, for instance, their favorite casino.
It's even more helpful if a firm is charging for something new.
Bank of America's now infamous $5 debit fee illustrates why adopting an airline model for fees won't do a bank any favors. The quickest way to incur a customer's wrath is to charge for something that was formerly free. Consumers are more receptive to paying for a new product or service, particularly if it fulfills a need which is why charging for new mobile offerings seems like a natural path forward.
Some industry experts are quick to
Regions'
The negative connotation associated with fees may make it tricky to ever introduce a $35 fee again. But consumers may be more receptive to, say, a small $1 charge for a paper statement or, yes,
There's one more thing that needs to be said in the wake of the financial crisis, various
Jeanine Skowronski is the deputy editor of BankThink. You can contact her at
