How To Make Profitable Account Holders Stay Longer

The magical powers of a garage are usually revealed when spring-cleaning time rolls around. A seemingly endless variety and magnitude of bikes, camping gear, tools, and more are concealed within a space designed to hold a single car. When organizing the garage, you discover the neglected items you forgot you had — and that could be otherwise put to good use.

Community financial institutions face a challenge that bears a striking resemblance to the task of cleaning a cluttered garage.


Can Idle Account Holders Become Raving Fans

Think of your retail portfolio composition as the garage. Over time, dormant accounts collect, and costly behaviors such as receiving paper statements become the norm. Alternately, the consumers who hold these accounts probably don’t have a strong affection for your institution — but for them doing nothing is easier than closing the account.

How should you address the situation to optimize your profits and transform the experience for the account holder? Each account holder represents potential profit for the institution, so you’d never think to toss them like rusty golf clubs or a broken lawn chair.

Fortunately, there is a range of solutions at your fingertips that are nowhere near as difficult as re-organizing a garage.


Turning A Pile Of Trusty Relationships Into Shiny Profit


Community financial institutions are sitting on a mountain of consumer trust. According to a 2015 study by Accenture, "Banking Shaped by the Customer," 86% of consumers trust their bank (or credit union) to securely manage their personal data.

The same study also found that 52% of consumers want proactive product recommendations from their institution of record.

Consumers trust you to protect their information and recommend the best products for their needs. Suddenly, what appears to be a dormant account may simply represent an account holder who is waiting to discover all of the ways you can help manage their financial life.


Three Areas Where You Can “Clean Up” And Win Big


Ideally, when you begin analyzing your retail portfolio, you want to focus on three areas:

  1. Increase non-interest income (NII) per account
    • Debit card usage is a good place to start. Find out how many account holders are using their debit card and how often. Interchange revenue builds up quickly without directly affecting the account holder.
  2. Decrease costs per account
    • Mailing paper statements is a thorn in the side of institutions, and many go straight from the mailbox to the trashcan. Look at your eStatement adoption rates — is there room for improvement?
  3. Engage consumers with products that make your institution top-of-wallet
    • Offering the types of rewards and conveniences that megabanks broadcast with their supersized marketing budgets is easier than you think. You already have the edge on consumer trust when it comes to service; look for ways to help consumers maximize the rewards and benefits built into your account offerings.

Your institution may already be in the midst of this "cleaning and fixing" process. And if it feels overwhelming, take heart — you don't have to tackle it alone. Kasasa's Retail Portfolio Optimization (RPO) team has sharpened its skills on more than ten years of data collected from 700+ institutions. We’ll walk you through a comprehensive analysis of your data and create a customized plan that incentivizes account holder engagement, eliminating waste and improving the bottom line.

Visit our website to learn more about how RPO can help your institution activate dormant profits.

Tags: Strategy