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Like any small business, community banks are finding that competing in todays
marketplace can be tough. In the past, many community banks were able to maintain their customers because families had banked with them for generations. Today, with banking competitors offering instant-issue cards, photo cards and savings programs, that is no longer always the case. Does this mean that community banks should just give up? Absolutely not. Community banks have some unique characteristics that make them suitable for a wide range of customers:
1. Strong Customer Focus community banks pride themselves on actually knowing their
customers as individuals.
3. A Business Model That Works when it comes right down to it, community banks are
under fire because they have created strong, profitable and resilient businesses. And thats why larger, national financial institutions want to grab part of that business in the first place.
Consider this:
aggregate balances up to 257 percent higher than their offline counterparts and were 78 percent more likely to stay with the financial institution over time, compared to their offline counterparts.1
financial institution, per customer, averaged $812 more for online bill payers than for offline users, and $241 higher for Internet banking users than for offline users.1
1. Online Users: Worth Their Weight in Gold, CreditUnionMagazine.com, November 1, 2006. http://creditunionmagazine.com/story.php?doc_id=451.
One solution is to join a national surcharge-free ATM network. Joining a national network provides community banks with an affordable alternative to fee reimbursement. For example, by joining First Datas STARsf surcharge-free service, community banks can give their cardholders anywhere/ anytime access to their demand deposit accounts. And by participating in the STARsf service, community banks and their cardholders can benefit from First Datas partnership with Allpoint, one of Americas largest surcharge-free networks. Allpoint offers STARsf participants access to more than 32,000 ATMs at leading retailers like Target, Walgreens and Costco. Offering services like STARsf provides a way for community banks to give their customers more fee-free options to access their accounts.
of $1,100 loss per card, an issuer with 300 compromised cards could experience a net fraud loss of $165,000 with a 50 percent fraudster usage rate (150 cards used).
(Source: American Bankers Association and Fair Isaac Corp.)
Data compromises can have a catastrophic effect on your financial institution. Fraud prevention is especially crucial for community banks that rely on a foundation of trust with their customers. First Datas fraud mitigation and risk management solutions enable financial institutions to respond quickly to fraud at the cardholder level and manage extensive fraud parameters. These solutions are flexible and fully customizable. Because there are so many different fraud solutions available, First Data consultants can help you determine which solutions are right for your organization, depending on your cardholder and transaction demographics and budget. For institutions unsure of where to start, our Fraud/Risk Premium Package is a great entry point. This fully turn-key solution affordable for institutions of all sizes offers real-time neural network scoring services, card validation for PIN and comprehensive card management tools. While investing in fraud solutions is your best first line of defense against fraud, its also important to educate your cardholders on how to protect their financial institution accounts. To help, First Data developed a Fraud Prevention Manual, which includes tips on how your customers can protect themselves against identity theft and other types of fraud scams. Plus, this guide also offers a number of worksheets and tips on how to plan for, or respond to, a data breach.
customers can cost a financial institution $30,400 using industry averages of $1,016 revenue value and $200 new account acquisition cost.
(Source: American Bankers Association)
80 percent of Americans
(Source: Maritz Research)
indicate that loyalty programs influence them and impact their purchasing decisions.
that 50 percent of debit cardholders would spend more on their cards if incentives were attached and that spending would increase by an average of 22 percent.
(Source: Synergistics)
For more information about how First Data can help with your customer retention efforts, visit www.firstdata.com or call 888.778.0202.
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