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The business case for adopting digital automation for small business and consumer loans

Posted by Trevor Knott, Sr. VP Business Development on Dec 4, 2017 5:47:53 PM

The small business and consumer unsecured loan market is enormous—$1.3 trillion by some estimates. For community and regional banks under $10 billion in assets, however, this market is quickly becoming a missed opportunity. Banks this size have a mere nine percent penetration into the market for small business loans under $100K and only an 11 percent share of the personal loan/credit card market. These paltry numbers are disappointing, especially when you consider institutions of this size used to stake claim to these loans before ceding them to non-bank, online lenders.

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Topics: Digital Lending, Digital Strategy, non-bank lenders

Protect your institution's reputation during the holidays by actively monitoring the web

Posted by Jeff Harper, President, BSG Financial Group on Nov 21, 2017 9:16:13 AM

It is mind boggling to consider the amount of data available on the Internet. On an average day Internet users conduct more than 60,000 Google searches per second, while billions of people upload data–photos, videos, comments–to Facebook, Twitter, YouTube, Google+, Instagram, Pinterest and LinkedIn. 

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Obtaining Reg E Decisions is Essential, but Financial Institutions Must do it Properly

Posted by Jeff Harper, President, BSG Financial Group on Nov 6, 2017 10:24:32 AM

 

Since the 2010 Amendment to Regulation E (Reg E), banks that want to offer and charge for overdraft coverage on ATM or one-time debit card transactions have been required to obtain affirmative consent from customers before charging an overdraft fee for extending overdraft coverage for these transactions. Many consumers have realized the benefits of opting into overdraft coverage when using their debit card, including avoiding embarrassment at POS and obtaining goods and services, like gas and groceries, at the time they need them.

However, a large percentage of customers—as many as 80% according to the Consumer Financial Protection Bureau (CFPB)—have not opted in (and/or made a decision about opting in) to their institution’s overdraft coverage for debit card transactions. For safety and soundness purposes, most institutions do not provide an overdraft limit for card channel transactions on accounts without a Reg E opt in decision. This results in a denied transaction whenever a customer attempts to access more than their available balance. It can be very frustrating for a consumer, especially a new customer, to have a POS transaction denied when attempting to use a debit card. The consumer receives no immediate feedback informing them that the transaction was denied due to insufficient funds because they didn’t opt-in to Reg E.

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Topics: Courtesy Overdraft, Debit Denials, Overdraft Compliance, Reg E

Personal loans can be profitable loans with digital technology

Posted by Trevor Knott, Sr. VP Business Development on Oct 17, 2017 7:06:01 AM

This article originally published on CUInsight.com, October 12, 2017

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Topics: Digital Lending, personal loan

Three Strategies Financial Institutions Can Use to Generate More Revenue in 2018

Posted by Jeff Harper, President, BSG Financial Group on Sep 27, 2017 10:23:31 AM

Heading into 2018, Service Fee Income, Digital Solutions and Deposit Growth will be high priorities for financial institutions according to a recent BSG Financial Group poll of bank and credit union executives. Further, 90 percent of the respondents say they plan to embark upon the process of budgeting and planning for these strategic initiatives within the next 30-60 days. 

Is your institution on track to identify areas of profitability and growth before year end? 

BSG Financial Group's "Revenue Strategies for 2018: A Video Series" introduces financial institutions to three proven income-building solutions, which incorporate innovative technology along with validated best practices and procedures.

Each 15-minute video in the series provides a brief overview of one solution that provides increased revenue and enhanced customer service–without taxing technology or compliance resources. See Strategy #1: Digital Lending below.

To watch the videos, go here.

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Topics: Courtesy Overdraft, Non-Interest Income, Budgeting, Digital Lending, CDs, Deposit Accounts, Selling Strategies

Industry Leader Touts Future of Courtesy Overdraft Programs

Posted by W. Barrett Nichols, founder & CEO on Sep 13, 2017 11:27:32 AM

While reading the latest installment of the Temenos Group blog, the old advertising line, "When E.F. Hutton talks, people listen," came to mind. Temenos is one of the largest producers of software for banking and finance, with over 2,000 clients across the globe, including 41 of the top 50 banks. The company, which spends 20% of its sales annually on R&D, is well-respected for its deep industry knowledge that helps customers stay ahead of a changing marketplace. When Temenos comments on an industry trend, people tend to listen. Or they should.

What the company had to say about courtesy overdraft programs may cause your financial institution to re-evaluate the solution you currently offer... or make you scramble to get one in place.

New Call-to-actionIn a nutshell, Temenos Chief Compliance Advisor, Blair Rugh, stated emphatically in the blog post:

"If you do not offer a courtesy overdraft program, I suggest you reconsider your decision.

Maybe your initial decision was correct for your institution at the time it was made, but possibly now that the dust has settled and the issues are better defined a different decision would be more appropriate."

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Topics: Responsible Approach, CFPB, Overdraft Compliance, Dynamic Overdraft Limits

Re-Emerging Overdraft Programs Must Focus on Service, Responsibility

Posted by Jeff Harper, President, BSG Financial Group on Aug 28, 2017 7:50:56 PM

The conversation about overdrafts has been somewhat non-existent the past several months as community banks and credit unions patiently wait for impending compliance directives, changes within the CFPB and an uptick in the economy. It seems now–with positive movement regarding all these concerns–it’s time to start talking about the opportunities overdrafts represent and the best way to seize them.

CUES recently reported that “with The Financial Choice Act likely to pass Congress, compliance on overdrafts appears headed for less restriction.” This assertion is based on the fact that part of the proposed Financial Choice Act dismantles key parts of Dodd-Frank, which created the Consumer Financial Protection Bureau (CFPB), whose role will be redefined under a new name. The act–among other improvements–“removes the board’s opaque and ill-defined unfair, deceptive, or abusive acts and Practices (UDAAP) authority,” while still emphasizing consumer protection. The bill passed in the House on June 8 and goes to the Senate next for consideration.

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Topics: Responsible Approach, CFPB, Overdraft Compliance, Dynamic Overdraft Limits

The power of segmentation & personalization in overdraft communications

Posted by Jeff Harper, President, BSG Financial Group on Aug 2, 2017 9:20:58 AM

This article was originally published on CBInsight.com.

In today’s highly digital, data-driven environment, account holders have come to expect personalized attention from the company’s they engage, including their financial institution. They want businesses to provide relevant and desirable services and solutions based on their needs and they often switch companies when communications are generic and impersonal.

Unfortunately, seventy-nine percent of consumers consider their relationship with their financial institution to be purely transactional, according to an Accenture Consulting study. However, by delivering more meaningful engagement, banks and credit unions can generate better response rates, as well as increase loyal account holder relationships. And thanks to modern technology, this one-to-one communication can be created dynamically based on your account holder’s account activity and a myriad of other data points.

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Topics: Courtesy Overdraft, Compliance, overdraft communications, customer service

5 Funding Strategies That Do Not Focus on Rate (+ Podcast)

Posted by Michele Rehm, Marketing Manager on Jul 27, 2017 9:07:24 AM

As interest rates rise, it is increasingly important to understand the economic factors involved with funding financial institutions. In a recent podcast called, "Enhancing Deposit Pricing in Today's Turbulent Financial Waters," Neil Stanley, CEO & Founder of The CorePoint (and presenter of BSG Financial Group's educational webinar, "Rethinking CD Sales in a Rising Fee Environment") shares his views on the future of deposit gathering as financial institutions feel more pressure to find funding.

According to Stanley, running a rate promotion is the thing that every banker thinks they have in their hip pocket, pulling it out if they need to grow funding. Stanley points out, that the problem with this strategy is that rate-induced growth often poisons the net interest margin of the bank. 

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Topics: CDs, Deposit Accounts, Retail Banking

The devil is in the details: Overdraft program charge-offs

Posted by Jeff Harper, President, BSG Financial Group on Jul 10, 2017 9:51:21 AM

It has been said that the “devil is in the details,” meaning paying attention to small things is important and can lead to positive rewards. Although this idiom applies to many facets of business and life, we find it particularly pertinent to the performance of your institution’s discretionary overdraft program.

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