BLOG: The Eagles Nest

 



Phishing, scams, and out right fraud appear to be a daily occurrence in everyone's life especially in e-mails, texts and via spurious phone calls. Since most of my friends are seniors I sure hear about it regularly and get the calls, "Should I open this?"! I expect that some do get taken regularly regardless of their firewalls and education. Personally in one week I saw a Bank of America text attempt, e-mail attempts from supposedly 3 Canadian banks/credit cards and one by Microsoft. There has to be continuous alerts to customers plus FI hotlines/chat centres to help individuals avoid the pitfalls being perpetrated by criminals. This should not be an ad hoc activity but regular warnings as well as soliciting experiences/examples which can be shared with others. Please  convince  your customers that no virus protection or so called fool-proof firewalls can stop the illicit intrusions on individuals' lives. Reporting the actions to police will only scare people further when they hear that they see these all the time and can't do anything about them.

Pat Palmer | Sunday, July 30, 2017 | Trackbacks (0) | Permalink

The full service rural branch has been a success for banks and credit unions for years with the local demographics and propensity to avoid change. People still have a social niche at the branch where they are recognized and treated to the extent of building longer term engagements. Still in the back ground we see that all agriculture, independent business and commercial clients have all been centralized to area points that can cover a region in a reasonable time frame. In any event most of these clients are online savvy for the majority of transactions and they will use convenient branches for others. The over 55 years of age is the evident group in most cases except in the vacation/holiday periods for those close to recreation and outdoor activities. Now the digital banking is catching on with young and old but the ATM's still attract a regular flow although the majority of transactions walking past the machines into the branches could easily be accommodate in the foyers. As these trends continue to grow and branch manager positions disappear on site coupled with socio/economic negative trends such as the closure of local schools, clinics and post offices, FI's will again have to make some hard decisions where multiple FI units co-exist. For example, I am familiar with numerous over-coverage such as a village of 1200 with three competing branches. Closures are very sensitive issues were there is one or many units in a community. Unfortunately, our research shows that many people in these smaller localities also have relationships with FI's in larger towns with more services less than an hour away.

Strategic planning will have to encompass various replacement alternatives which we have written about in the past especially if you are not a dominant player locally. The public relation and customer impacts need a truly empathetic approach at every turn.

Pat Palmer | Saturday, July 29, 2017 | Trackbacks (0) | Permalink

We continue to encourage FI's and consumers to consider fintech opportunities. Some countries are seeing a good take-up in partnerships and utilization. Unfortunately, Canada is a disappointment on the rate of adoption/collaboration. The Globe and Mail ran an article this week reporting on Ernst & Young LLP's, FinTech Adoption Index and not surprising that Canada lags behind much of the world in adopting fintech services with only 18% of digitally active Canadians having used two or more fintech services in the past 6 months, compared to 33% globally.

China's rate is 69%; India 52% and Britain 42%. Canadians stuck with the big banks during the 2008 financial crisis and there is a low awareness about fintech opportunities. Yes, the major banks can cite a few examples of partnerships/collaborations but for a group that is falling back on their technology images with their own financial analysts they could improve their value propositions internally and externally with more aggressive investments in fintech companies. The big disappointment is with smaller and medium sized FI's which do not offer digitally enticing customer experiences to the level possible with these partnerships. There seems to be an inertia and lack of strategic, innovative thinking.. 

With media options and programs available from other countries Canadians will get exposure to what is possible and search for domestic equivalents. 

Without a doubt Canada will catch-up and eventually exceed the global average.

Pat Palmer | Friday, July 28, 2017 | Trackbacks (0) | Permalink

Research, ours included, continue to highlight the growing sensitivities with retail banking fees by traditional institutions-banks and credit unions, In the past retail banking was normally a cash cow for FI's demonstrating stability in incremental revenue and profitability. In fact the normal practice was to increase fees by "nickels and dimes" annually regardless of operating costs. Few organizations could verify the true cost of transactions or activities which were always assigned a share of headquarters' overheads (around 30%) plus other fixed expenses. People are quite aware that technology has both reduced transaction costs and encouraged customers to increase the number of transactions- all which are assigned fees and generate more revenue at less cost. Additionally, technology has facilitated many manual activities in retail banking e.g.overdraft management, interest calculations, statement/passbook updating, transfers locally and globally, etc.

Non traditional institutions such as Tangerine, PC Banking, EG Bank, etc have shown great growth by targeting financially literate consumers. With the aid of fintechs and large retail brands this disintermediation is going to continue at an increasing rate.

We believe retail banking is at a serious crossroad with multiple, increasing fees and the associated threat of business erosion.

Take time to reassess fees and address the erroneous culture that has grown unabated and with poor rationale. Let's be honest with real costs, not loaded costs, and how compensation is recovered. Innovative thinking is needed and some of the potential solutions are available within the total customer relationships' values. Some FI's are testing the water by eliminating fees e.g. on e-transfers and use of other institutions's ATMs but these are not really changing the fee culture in retail banking. If traditionals continue their compensation complacency the impacts will be the silent leakage of business and loss of brand value. Strategically look at fees from the customers' perspectives and improve perceptions and realities.

Pat Palmer | Sunday, July 23, 2017 | Trackbacks (0) | Permalink

The J D Power survey on Canadian FI's customer satisfaction is out! Shame on the big banks which continue to fall back in most categories. Tangerine, PC Financial, ATB Financial and National Bank are better that the big 5 banks. When you dive into the results you see the continued price sensitivities bringing them down which we have written about many times. We will expand on this in our next e-Journal.

If you are going to "nickel and dime" customers with more fees and fee increases while automating more transactions and declining service, you are putting yourselves right up there with government services.

Time to give your heads a shake and get back to customer centricity and value-added.

Pat Palmer | Friday, July 14, 2017 | Trackbacks (0) | Permalink

 


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