OptiRate Corporate Brochure. Learn about us at http://www.optirate.com/banks http://bankblog.optirate.com

1. Survival
of
the
Fi/est
How
Community
Banks,
Regional
Banks
and
Credit
Unions
can
regain
profitability
and
asset
growth
through
targeted
Customer
Acquisi?on

2. Community FIs are well liked and respected by
consumers
Community Banks, Regional Banks and Credit Unions outperform their
larger competitors based on Customer Trust, Loyalty, Net Promoter
Score, willingness to Refer, among others.
Community FIs offer premium rates
Community FIs offer superior service and pricing on products and
services. In fact, as many as 10% of the Community FIs offer deposit
rates that are 2x – 8x greater than the national average rates.
Naturally, given these factors, it would be reasonable to expect that
Community FIs would be a driving force in the Banking Industry with
significant customer penetration.
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3. Community FIs underperform on all factors
BUT… As a group, Community FIs did not participate in growth in
2010, as virtually all of the growth accrued to mega-banks in 2010. In
fact, Community Banks lost $46 billion in deposits in 2010, while
Regional Banks grew deposits by a mere $4 billion. Growth at Credit
Unions was lackluster during the past 2 years – with the largest CUs
(assets > $1 billion) capturing more than 60% of all growth. Smaller
FIs have been unable to compete effectively!
And the often mentioned flight from mega-bank to Community FIs has
been greatly exaggerated. Mega-banks control a disproportionate
share of accounts with no evidence to support a reversal of this trend.
Larger Credit Unions (with assets > $1 billion) control approximately
40% of all customer accounts, while the smallest FIs (assets <$100
million) control just 20% of the customer base.
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4. Community FIs face significant challenges
The world has changed, so have
§ your markets
§ your competition
§ your customers
§ your prospects
§ your challenges, and
§ your opportunities
The past several years has seen tremendous changes and shifts in
technology, customer adoption of new channels, shifts in consumer
preferences, regulatory changes and ever increasing competitive
pressures. These and other factors are breaking the ‘Laws of Banking’,
including
§ FIs must have a physical presence in a geography to compete
§ Branches are the hubs of retail banking activity
§ Community FI market segments are protected from mega-bank
intrusion
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5. Community FIs face significant challenges
Competitive environment is only getting more competitive. The
deployment of tools by banks enabling remote banking and adoption of
online services by consumers has forever changed the age-old
competitive structure. FIs no longer need a physical presence in a
geography to compete.
New entrants such as Ally Bank, ING Direct, Amex Bank, Discover
Bank, Capital One Bank and others have proved this beyond the
shadow of the doubt. Regardless of their business models, consumers
are attracted to their message and have flocked to these institutions.
In parallel, the competitive environment in the “traditional” branch
centric model is intense. 82% of all deposits are concentrated in 83
metropolitan areas with 50 or more Banks and Credit Unions. Nearly
60% of all deposits are held in regions with 100 or more FIs.
The opportunity for Community FI to stand out is limited at best.
Community FIs now have to develop attractive product offerings that
are available nowhere else. Community FIs must differentiate to
survive!
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6. Community FIs face significant challenges
Bankers’ bread-and-butter product – checking account – is no longer a
viable core. With the recent regulatory changes, most checking
accounts (and by extension, most relationships) will be unprofitable.
The era of OD/NSFs and Interchange fees subsidizing the cost of
services are over.
Worse, the customer base in most FI is highly skewed to money losing
relationships. Most FIs rely on less than 20% of their customer base to
generate total enterprise profits. With intensifying competitive
environment, this trend is unlikely to improve without a concerted
effort by individual FIs.
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7. Bold actions are required
FIs must refocus on activities and customers that generate growth and
profits. FIs must refocus their attention to
ü High Net Worth Customer Acquisition
ü Online Marketing
ü Increasing geographic footprint “virtually”
These are the 3 things that distinguish a successful, fast growing and
profitable FI from an “also-ran” that will continue to struggle.
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8. A new platform will grow profitable customers
while at the same time increasing FI growth
and profitability.
OptiRate provides FIs with a unique and innovative platform that
enables growth of High Net Worth customer base.
By combining the best of class capabilities – OptiRate’s customer
acquisition platform and FI’s relationship management and cross-sale
capabilities – the partnership will result in significant FI growth and
improved profitability.
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9. Talk with OptiRate today
Serge
Milman
Serge.Milman@Op?Rate.com
415.260.3403
(c)
800.319.6784
x600
(o)
www.Op?Rate.com
|
www.Op?Rate.com/Banks
|
BankBlog.Op?Rate.com
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