How, then, does a bank work within the confines of a third-party rule maker to increase its element of control to maximize the potential a debit card program brings to the bank’s bottom line? Here are some important questions every bank should ask to determine their commitment to a profitable and efficient debit card program: How does your bank work through the debit card application process? • Is a card application automatic? • Are employees encouraged/incented to sell the debit card program? • What is your bank’s underwriting process for debit cards? Is there an internal process in place to follow up on nonactivated card accounts? • How frequently are issuance reports reviewed? • What is the internal procedure for follow-up calls to non-activated card accounts? How does your bank oversee the program’s risk assessment? • What are your bank’s policies and procedures for tracking fraud trends? • How quickly does your bank act on trends discovered locally or nationally? Does your bank budget for debit card loss? • You might be surprised to know that many banks fail to budget for debit card losses. Establish a method of accounting for quarterly and annual risk no differently than you do for loan losses. How frequently, if at all, do you assess your program’s outstanding card portfolio? • Do you measure card count versus active cards and statused cards? What types of marketing programs has your bank implemented to increase your program’s activity and profitability? • How does your bank encourage your cardholder accounts to be “top of wallet”? • Is your bank’s card the first card your customers use? • Do you issue business debit cards or Health Savings Accounts? • Business debit cards generate interchange revenue for the card-issuing bank at a greater rate than a consumer card. How many consumer cards are you issuing to DBA accounts, sole proprietor accounts or agricultural accounts that could be converted into a business debit card generating higher income? Does your bank issue contactless cards? • COVID has heightened customers’ awareness of contactless capabilities and shown the speed and ease of a contactless transaction. What is your bank’s appetite for tokenization and mobile wallets (Apple Pay, Samsung Pay, Google Pay)? • Customer and marketplace demand will tend to dictate your appetite, but the marketplace is moving in this direction. Heightened emphasis on better internal procedures, increased portfolio review, employee incentives, accounting for debit card fraud and loss and a marketing plan that aligns with your bank’s strategic plan will position you to make the most of the debit card program you have. The benefits go far beyond the debit card program and dovetail into the bank’s overall service mission. A debit card program may seem to be auto-pilot, but mindfulness, internal processes and effective marketing can pay huge dividends and increase income and, ultimately, customer loyalty in the process. Eric Hallman is Vice President — Bank Card Sales & Support at Bankers’ Bank of the West. He can be reached at ehallman@bbwest.com. 7 Colorado Banker
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