The future of non-interest income with Julie Roughton | Community In Focus

The future of non-interest income with Julie Roughton

New non-interest income (NII) products often hold the promise of stable, consumer friendly revenue for community financial institutions, but the reality is complex. It can be difficult and time consuming to discover which products your account holders want and which partners can help you offer them (or if you have the resources to build it in-house). Our guest for this episode is Kasasa’s Director of Brand Management Julie Roughton, who is our resident expert on the NII landscape and what you need to know before you wade into it for yourself.

Show notes:
  • 0:30 Opening story – product diversification can be a powerful tool, or an intimidating challenge. You want your consumers to trust your recommendations, not run away screaming.
  • 3:10 The woman who knows all about value-added products and non-interest income — meet Julie Roughton, Director of Brand Management at Kasasa.
  • 3:45 What Kasasa wants to do in the world of value-added non-interest income opportunities. To provide a stable stream of revenue for community banks and credit unions based on value added products that can offered at parity with megabanks.
  • 4:40 Discussing the two broad categories of non-interest income and the various types of value-added products that are commonly seen in the market.
  • 7:15 How do consumers perceive an institution that offers value-added products? Do they even know
  • 8:05 USAA and BB&T represent two very different approaches to offering value-added products.
  • 9:30 What does it take for a community financial institution be distinctive with their offering in the marketplace? A fully digital experience where consumers can shop, buy, and service their selection from the comfort of their own home. Consumers do not like being forced into a channel they don’t like. It’s important to meet consumers where they.
  • 11:30 How price sensitive are consumers when it comes to value-added products? Consumers often are willing to make trade-offs between price and value. It’s important to do some research and make sure that your prices are matched to consumers expectations.
  • 13:20 Do your research before you tackle something like this on your own.
  • 14:25 There’s an opportunity to expand the trust you have built with consumers. Position your institution as a partner who is helping meet needs that consumers have beyond checking accounts.
  • 16:30 Is it feasible for most community financial institutions to build out these types of products in house? It requires expertise in a lot of different areas such as marketing, data analysis, legal, compliance, and sales. It’s possible, but it’s a big challenge. By choosing the right partners you can speed the process up.
  • 17:45 Announce Kasasa Care, an online marketplace and referral marketing program that can help community banks and credit unions offer non-interest income generating products with ease.
  • 19:20 What does Kasasa mean when we talk about referral marketing? Referral marketing programs are marketing campaigns that are sent on behalf of Kasasa and a preferred partner to an community financial institution’s consumer base. It’s based on a lot of analytics and data that helps match the best offer to the right consumer. The community bank or credit union gets to benefit from a portion of the transaction value.
  • 21:10 What’s the level of effort for the community financial institution in a referral marketing partnership? At Kasasa we’re trying to make the level of effort for the bank or credit union as low as we can. If you’re establishing contracts with partners on your own, it can have a high degree of complexity that repeats for every product. Kasasa is managing those contracts with partners on behalf of our clients.
  • 24:15 How should institutions think about their brand when partnering with someone who is providing the product or service? Based on our research, consumers want to have these products offered by their institution. In the health vertical, 91% of consumers said they would love to a prescription savings plan from their financial institution. Of the consumers who don’t have vision or dental insurance 86% said they would sign up for it from their financial institution.
  • 27:00 Community financial institutions have built up a ton of goodwill with their consumer bases and that makes the opportunity to offer value-added products a huge one.
  • 27:35 What should financial institutions be wary of when entering into the process of offering new non-interest income products? It take a lot of manpower to launch it. You also have to train and incentivize your front-line staff. It’s a lot of information to have your staff get fully educated on. If you can drive to a digital marketplace where they can research, buy, and service online, it greatly reduces the burden.
  • 30:00 Should institutions be concerned about offering too many products? That is a concern, but ideally you can select the offers that fit your consumers and refrain from marketing the irrelevant offers.
  • 31:15 How should institutions do the research to discover what their consumer base wants? One method is to look into your existing database. You can glean a lot of information from the transaction level data about who is already paying for these types of products from other providers. You need to have the analytics capabilities to perform that type of investigation into your own data.
  • 34:30 Relevancy is key in order to get the most out of your marketing budget. You want to have a strong initial understanding of the consumers eligibility, demographics, frequency, the creative assets used in the campaign.
  • 35:23 Conclusion. There are a lot questions to answer when it comes to offering new non-interest income products. If your institution is going to successfully diversify your product line, these are questions you need to find answers for.