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Jeff Harper, President, BSG Financial Group

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What Has Your Overdraft Provider Done for You Lately?

Posted by Jeff Harper, President, BSG Financial Group on Feb 27, 2017 11:46:51 AM

Webinar Will Provide a 'Road Map' for Financial Institutions to Assess the Performance of Their Overdraft Service Provider Using Key Metrics 

Over the past 20 years most financial institutions have partnered with a third-party overdraft provider. However, much has changed in those twenty years, and far too many programs are running on ‘auto-pilot.'

There are many opportunities to improve compliance, income and service with regard to overdraft management. If your overdraft management provider hasn’t communicated these to you or enhanced its software, then you have to ask yourself, ‘What has my provider done for me lately?'

BSG Financial Group will host a webinar called, "What Has Your Overdraft Provider Done for You Lately?" on Thursday, March 9 at 2 pm EST that will help you answer that question.

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Topics: Webinar, Overdraft Provider, Overdraft Management

More Financial Institutions Looking to Cloud for Efficiency, Security

Posted by Jeff Harper, President, BSG Financial Group on Dec 14, 2016 9:20:48 AM

 

 

 

It used to be that one of the worst critiques your boss could deliver was accusing you of “having your head in the clouds.” You still don’t want your head there, but for more and more financial institutions, having your data and operations in the cloud is just good business.

As traditional computing methods continue to deliver decreasing profits, it will become even more apparent that it is in your organization's best interest to locate and use a properly hosted cloud-based vendor.

Here are three reasons why...

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Topics: Cloud Safety, Cyber Security, Cloud Computing

The Outlook for Automated Overdrafts Seems Bright

Posted by Jeff Harper, President, BSG Financial Group on Nov 28, 2016 6:28:51 PM

Now that the election is over, there is much speculation about how a Trump presidency will impact our industry. Most everything we read is positive, especially about the future of automated overdraft programs. 

In particular, we are encouraged by:

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Topics: Overdraft, Compliance, CFPB, Overdraft Compliance, Overdraft Provider

Three Top Challenges Facing Financial Institutions (as told to us by those who know)

Posted by Jeff Harper, President, BSG Financial Group on Nov 7, 2016 8:00:00 AM

Like many financial institution executives this time of year, we at BSG Financial Group have recently participated in numerous industry trade shows and conferences.

In a two-month period beginning in August, we exhibited at or participated in a plethora of conferences, including those sponsored by the Financial Managers Society (FMS), Association for Financial Technology (AFT), Virginia Association of Community Banks, the Bank CEO Network Conference, Jack Henry Banking... to name a few.

Attending these events is very important to us, as they connect us with customers and potential customers alike. More importantly, they give us an opportunity to learn first-hand the most pressing challenges for financial institutions, while validating and ensuring that we offer the programs and services to effectively address these concerns.

Listed below are three of the top challenges that financial institutions face—as told to us by financial executives at these recent conferencesas well as our responses/solutions:

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Topics: Fee Income, Financial Institutions, Strategy, Profitability

The Whole Story About Overdraft Matrix Systems

Posted by Jeff Harper, President, BSG Financial Group on Sep 26, 2016 10:58:16 AM

An August 17, 2016 article entitled, “Disparate impact studies especially tough on dynamic matrix systems,” caught our attention. The article, in our opinion, attempted to cast a negative light on “overdraft matrix systems” or overdraft processes that can cause a customer’s discretionary overdraft limit to change from time-to-time based on the risk profile of the customer. 

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Topics: Dynamic Limits, Courtesy Overdraft, CFPB, Dynamic Matrix System, Overdraft Matrix

Your Account Holders Are Not Waiting for a CFPB Decision on Overdrafts. Why Are You?

Posted by Jeff Harper, President, BSG Financial Group on Sep 6, 2016 5:46:58 PM

The current state of the overdraft industry can be summed up in one word, “WAITING.” 

BSG Financial Group hears from some institutions that they are delaying offering an overdraft privilege program until the Consumer Financial Protection Bureau (CFPB) decides how financial institutions must manage consumer and business overdrafts.

This waiting reminds us of a quotation from the novelist Morris West who wrote, “If you spend your whole life waiting for the storm, you'll never enjoy the sunshine.” 

We—banks, credit unions and service providers—have all been waiting for more than two years for the regulatory agency to finally announce its conclusions. Now it looks like mid-2018 before any material changes might occur. And even then, the changes recommended by Pew Charitable Trust (hired by the CFPB to handle the research aspects of their regulatory review) seem rather minor: revised disclosures, reasonable fees, and standard posting order.

In the meantime… while we wait, your account holders seek short-term liquidity elsewhere and your bottom line pays the price.

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Topics: Overdraft, CFPB, overdraft privilege

Overdraft Privilege Myths Debunked

Posted by Jeff Harper, President, BSG Financial Group on Aug 16, 2016 11:59:28 AM

Most financial institutions acknowledge that overdraft fees represent a remarkable source of non-interest income. What may not be clear to some is the fact that overdraft privilege programs are more than just a source of revenue. Recent data suggests that the service offers as much of a benefit to the consumers who use it as it does to the institutions that provide it. 

Consumer Financial Protection Bureau (CFPB) director Richard Cordray has said on many occasions that his agency is not looking to do away with overdraft services (but is instead leaning toward minor changes in how institutions manage the programs). As such, it doesn't appear overdraft programs are going away. 

So how should community institutions view overdraft privilege in the current environment?

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Topics: Courtesy Overdraft, Compliance, Overdraft Protection, CFPB, overdraft privilege

Dynamic vs. fixed overdraft limits: And the winner is…?

Posted by Jeff Harper, President, BSG Financial Group on Jun 21, 2016 10:25:07 AM

In this corner… the Contender, Fixed Limits, challenging the formidable upstart, Dynamic Overdraft Limits….

Indeed it may seem like you’re in a boxing match when deciding which type of overdraft limits you will offer in your automated discretionary overdraft program.

Both types of limit-setting strategies enable your institution to automatically allow or disallow overdrafts for those account holders who utilize your service.

The Contender:
FIXED LIMITS provide a “one-size-fits-all” approach that is determined at account opening. All account holders who qualify to be in the program, receive the same overdraft limit; OR the limit varies based on account type (i.e., $550 for Free Checking and $750 for Premier Checking).

The Challenger:
DYNAMIC LIMITS are calculated automatically based on a myriad of account holder data points, including specific deposit and overdraft activity, related balances and more. This data enables your institution to establish a risk profile for each account and assign individualized overdraft limits based on the account holder’s ability to repay the overdraft and fees at any given time.

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Topics: Overdraft Compliance, Overdraft Management, Dynamic Overdraft Limits

Community Banks Can 'Up Their Game' With the Right Digital Lending Partner

Posted by Jeff Harper, President, BSG Financial Group on May 18, 2016 8:00:55 PM

American Banker published another article last week about the opportunities that exist for community banks to enter the digital lending space, which is now almost exclusively dominated by marketplace lenders, such as LendingClub and others.

Marketplace lenders are the online outlets that pair borrowers and lenders through the use of a digital platform without a traditional bank intermediary—often underwriting and delivering loans outside traditional bank debt capacity and coverage ratio underwriting and pricing. They are generally considered rivals to community banks, siphoning off customers who choose convenience over often high interest rates (some as high as 29%).

The article, entitled, "Marketplace Lending Was Just What Banks Needed" points out that, despite some recent bad publicity, marketplace lenders have succeeded in filling the needs of consumers who crave the convenience of being able to apply for a loan digitally and get funds quickly. Their focus on automating the small business lending process has helped them double their outstanding portfolio balances every year since 2000.

Their success has forced community banks to 'up their game' and become part of the digital revolution.

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Published article: Use the right overdraft provider to do the right thing

Posted by Jeff Harper, President, BSG Financial Group on Apr 12, 2016 7:00:00 AM

Published on CUInsight.com, April 8, 2016

I think we can agree that there are consumers who need short-term liquidity options. Among several recent studies, the Brookings Institution reveals that one-third of American households live paycheck to paycheck; and American Banker data cites that 54% of checking account customers are in poor financial health.

Financial institutions can provide a valued service by offering a compliant overdraft privilege program to help these individuals manage unexpected, ill-timed expenses. In fact, a recent study by Novantas said that 66% of overdrafts occur when consumers knew they have a low balance, but want the payment to go through anyway.

So how does your financial institution offer a cost-effective service without encouraging reckless behavior? A good place to start is to review how your third-party overdraft vendor is compensated, which can affect the way the program is viewed by regulators and how it is executed vis-a-vis account holders.

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Topics: Overdraft, Compliance, published articles

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