Pub. 8 2020 Issue 3

www.uba.org 16 CHECK WRITERS ARE MORE IMPORTANT THAN EVER BEFORE Contributed By Harland Clarke I n this era of digital banking, it may be surprising just how many people still write checks — and why. Just as surprising is the lost opportunity financial institutions face by missing out on check order capture at account opening or leaving it up to third-party providers to drive check reorders. There’s money being left on the table, and the revenue potential of check programs is being downplayed. THE VALUE OF CHECKS Recent research has revealed some eye-opening trends with check writing: • The vast majority of Americans use checking accounts, with only 6.5% of households being unbanked 1 • 14.5 billion checks are still being written each year 2 • “Order Checks” ranks third in the top 10 search terms on bank and credit union websites 3 What does all this mean for the financial institution? It means that while checks as a payment method continue to decline, con- sumers are still writing checks. The average household balance by the number of checks written each month increases based on how many checks are written. 4 Furthermore, customers who order checks from their financial institution hold higher total household balances. 5 A customer’s affluence is also more highly correlated to check writing than to age. Regardless of age, as income increases, so does check utilization. AVOID MISSED OPPORTUNITIES Given these findings, it’s in the best interest of financial institu- tions to ensure new customers order checks when they first open an account, regardless of channel. Not ordering checks at account opening is inconvenient for the customer — and it represents significant lost revenue for the financial institution. How much lost revenue? For an average-sized institution that opens 1,000 new accounts per month, providing the remaining 70% of new customers with check orders (and assuming average per-order revenue and reorder cycles over the lifetime of those accounts), the total would be $400,000. 6 HARNESS THE POTENTIAL The big question most financial institutions have is how to reach potential check writers to harness the revenue potential they