the result be a disruption of service or penalty fee that exceeds the original overdraft fee? If the customer doesn’t know when a transaction will be paid or is surprised by merchant return fees or other charges, how is that providing good service? Or, when a returned item triggers the reduction of a customer’s credit score, making it more difficult to get a loan or land a job, how is that building trust for the future? What’s more, reducing an overdraft fee from $35 to $10 may seem like a major concession, but will other fees need to be put in place to make up for lost revenue? Swapping one fee for another — or increasing balance requirements to access a service — isn’t exactly the best way to garner goodwill since it can make having a checking account unaffordable for some consumers. Prevent confusion and controversy with reasonable fees and transparent procedures A consumer-focused overdraft strategy should include a beneficial last-stop option to your other service offerings, i.e., accessing funds from another account, a credit card or line of credit, that can help customers when they need access to liquidity. If they have difficulty managing their checking account and do not have a savings account or access to a line of credit to cover an expense, a fully disclosed, reasonably priced overdraft privilege service provides a reliable safety net. When your customers know the fee and their limit upfront — along with how to use the service responsibly — they will find value in having access to convenient financial peace of mind. Gain confidence with a thorough program evaluation The best approach begins with open communication and transparency regarding how your overdraft privilege services work. A comprehensive, professional program review can identify important details that will benefit your customers and your bank, such as: • Does your overdraft strategy follow a consumer-first approach? • Is your fee structure appropriate for your market? • Are your processes and procedures fully transparent? • Are your customer communications effective and compliant? • Are you offering financial education to all customers to limit excessive overdraft usage? • Do you have other service options available that might be a better fit for some customers? • Is there an effective staff training program in place to increase employee knowledge and confidence? • Which key metrics should you be monitoring to ensure effective program results? Stay on the customer side of service delivery No one can ignore what’s currently happening with market changes. But limiting access to a responsible overdraft privilege service isn’t the right solution if your operational philosophy is built on providing financial stability to your account holders. Despite the current narrative, there is a need for overdraft services. More importantly, there is a way to deliver the service to be fair, transparent and consumer-friendly. JMFA is one of the most trusted names in the industry. Whether it’s recovering lost revenue, uncovering new savings with vendor contract negotiations, creating more value, serving account holders better or delivering a 100% compliant overdraft service — JMFA can help you deliver measurable results with proven solutions. To learn more, please visit JMFA.com or call (800) 809-2307. 801.676.9722 | 855.747.4003 sales@thenewslinkgroup.com ARE YOU READY FOR GROWTH? ADVERTISE IN THIS MAGAZINE TO ROCKET YOUR BUSINESS FORWARD. March • April 2022 15
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