Pub. 8 2020 Issue 3

ISSUE 3. 2020 17 represent. Doing so requires a comprehensive program of best practices that includes five main performance components. 1. Order capture —Without securing the first check order at account opening, future opportunities are compromised. Fee income, cross-sell, up-sell, reorders — all are potential- ly lost. The most important step a financial institution can take to improve order capture is to ensure new account rep- resentatives — and other employees — understand the im- portance of check capture. Employees at all levels must be aware that the vast majority of consumers still use checks. This should be included in training and materials — and underscoring the importance of check writing in defining primary financial institution relationships should be a priority. Another important step is to ensure that checks are a clearly defined part of the account opening process. The number one reason customers don’t order checks at account opening is because they were never asked. 7 2. Channel optimization — Once the initial check order has been captured, branch employees should not spend another minute on check orders. This frees them up to do other tasks and improves the overall efficiency of the branch. Instead, customers should be moved to self-service channels to place reorders of checks. In addition to improving branch efficien- cy, online and phone channels can introduce products and services that branch employees may not. Additionally, there is a significant increase in average order value (AOV) when customers go online to place their own reorder. 8 3. Marketing — Checks, checkbooks and check delivery vehi- cles can all be used as marketing tools designed with engagement in mind, branded to promote your financial institution’s colors, look and feel. Consistency in branding is key, as the average revenue increase attributed to always presenting the brand consistently is 33%. 9 Custom designs that represent the community, local organizations and charitable causes can be utilized to drive check orders and reinforce the financial institution’s standing in the com- munity. It also gives high message visibility, frequency and longevity. Every time a check is written or a new check pad is accessed, an impression is made. The impressions repeat over the lifetime of the check order. 4. Cross-sell and Up-sell — If nearly $1 million in lifetime revenue isn’t incentive enough, consider the lost cross-sell and up-sell opportunities. Remember that check writers buy an average of two more products and services from their financial institution than non-check writers. Best-in-class print technologies provide full color, customized financial product messages targeted to specific account types. Har- land Clarke’s CheckFolio packaging, introduced a few years ago, can accommodate full-color messaging for financial in- stitutions to showcase the services most important to them. 5. Security — A 2019 ABA survey reported that check fraud accounted for 47%, or $1.3 billion, of industry deposit ac- count fraud losses 10 affecting multiple generations, includ- ing Millennials and Baby Boomers. In addition, $432.4 million in fraud was reported to the FTC through the end of March 2020. 11 In light of this reality, check security, especially for your high-value, loyal check writers is very important. The proliferation of mobile banking also means customers want to know what kind of mobile security features your financial institution utilizes and what type of support they have access to in the event they become a victim of check fraud. In fact, 22% of consumers surveyed said they would use mobile capture more frequently if they had a better assurance that their checks had been deposited securely. 12 Ensuring your check program focuses on security and that your institution effectively communicates any security-related features to your customers gives them peace of mind, delivers a better customer experience and builds loyalty. THE BOTTOM LINE Check writers are critical to the profitability of a financial insti- tution. They are loyal, have more investable assets, and buy more products and services from their financial institution. It’s essential to embrace them at every level of the organization. Most importantly, check ordering should be included with each account opening. It not only provides customers with a product they need — but it also ensures they purchase it from YOUR financial institution. This opens new marketing channels to cross-sell and up-sell financial products and services over the lifetime of the account. With 14.5 billion checks still being written each year, 13 it’s a demographic few financial institutions can afford to ignore. n 1 Eneriz, Ashley, “What Is a Checking Account?” GoBankingRates, June 2020 2 The 2019 Federal Reserve Payments Study 3 Haskins, DJ, “The Top 20 Terms Consumers Use on Banking Websites,” BAI, June 2019 4 CE Solutions check industry research 5 Ibid. 6 Harland Clarke 2020 Data 7 Harland Clarke Internal Client Study 8 Ibid 9 Dopson, Elise, “Brand Consistency — The Competitive Advantage and How to Achieve It,” Lucidpress, November 2019 10 ABA 2019 Deposit Account Fraud Survey 11 Tableau public 12 Cocheo, Steve, “Key Customer Experience Trends in Mobile Photo Deposits,” The Financial Brand, February 25, 2020 13 2019 Federal Reserve Payments Study 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.