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How FIs Are Increasing Debit Use

HOUSTON-Financial institutions are encouraging consumers to make greater use of debit cards through a variety of methods, according to the 2010 Debit Issuer Study, commissioned by PULSE.

The study found 72% of issuers view improving the performance of their debit portfolios by increasing penetration, activation and usage as a top priority this year. One of the key tactics issuers are using to accomplish this objective is the deployment of instant issuance technology.

"Although instant issuance can result in higher issuing costs, financial institutions offering instant issuance can benefit from increased profitability, greater customer satisfaction and better security," said Cindy Ballard, executive vice president of PULSE.

In addition to instant issuance, the study found issuers are adopting a "back-to-basics" approach in response to the recession. Many financial institutions are focused on acquiring new account holders and encouraging current customers to use their cards for small- ticket transactions, such as coffee and quick-service restaurants. Issuers also are exploring several approaches to engage debit cardholders through targeted marketing campaigns, offering incentives and emphasizing the benefits of debit over alternative payment methods.

For info: www.pulsenetwork.com


Customer Satisfaction Explored

SALT LAKE CITY-Every company wants to measure-and improve-customer loyalty. The question is: are they doing it correctly?

Allegiance, Inc., sought to answer that with its white paper titled "Customer Data: The Essential Element of Your Enterprise Voice of the Customer Program," which offers an overview of the various types of customer data and feedback channels that are crucial to the success of "Voice of the Customer" (VOC) program.

According to the paper, customer data should be gathered through both structured and unstructured feedback. Structured feedback is solicited primarily through surveys. Unstructured feedback is unsolicited and comes in many forms, including social media, online forums and communities, blogs, "Contact Us" pages, and letters or e-mails to the company.

The challenges are to: find ways to harness all of this data and put someone in charge of acting on the insights gained from it.

"Until recently, structured feedback was the main way that companies could hear from their customers about their experiences," said author Annette Gleneicki, senior director of customer success for Allegiance. "Customer e-mails or letters were mostly 'cosmetic' because companies rarely responded to that feedback or changed processes because of it. However, today customers have new ways to communicate, and companies need to incorporate unstructured feedback to get a complete picture of customer loyalty and engagement."

For info: www.allegiance.com


Banking Pay Budgets To Decrease

KANSAS CITY, Kan.-Although many economists have predicted the U.S. may see very modest economic improvement in 2010, pay increase budgets have continued to decline over the past year.

The recently released 2010 Compensation Data Banking and Finance survey results show pay increase budgets have fallen to 2.6%, down from 2.9% in 2009. Little change is expected over the next year, as banking and finance organizations predict a slight uptick in 2011 to 2.9%.

According to the survey, pay increase budgets vary within the industry as credit unions had the highest pay increase budget, 2.9%. Consumer finance and mortgage companies followed at 2.8%. Commercial bank respondents had the lowest pay increase budget, 2.3%. Credit unions are projecting the highest pay increase budget in 2011 at 3.2%, with commercial banks projecting the lowest, 2.6%.

Banking and finance companies in the Midwest reported the highest pay increase budget, 2.6%, followed by the East, South and West regions at 2.5%.

For info: www.compdatasurveys.com


MRI: Deposit Rates Vary By Region

SAN ANSELMO, Calif.-Reaction time to national trends in deposit pricing varies drastically by pricing region, according to new analysis from Market Rates Insight.

The consultancy said in the first half of 2010 (26 weeks) the national average rate for deposits dropped 0.18%. It took the New Jersey pricing region only four weeks to drop 0.18% in its average rate for deposits, followed by Michigan at 6 weeks, Pennsylvania at 13, Virginia 17, and Oregon at 19 weeks.

On the other hand the pricing regions that did not follow the national trend in declining rates for deposits were Illinois, Louisiana, Massachusetts, Wisconsin and Montana. These five pricing regions had minimal or no change in their average rate for deposit during the first half of 2010 despite the decline in the national average. MRI said the top five pricing regions in reaction time are also those that experienced the greatest drop in deposit rates during the first half of 2010.

"These findings are an indication of the diversity of the deposit market," said Dan Geller, EVP at Market Rates Insight. "Clearly, there are advantages to regionalized pricing for deposits, which adapts to the specific conditions in each market."

For info: www.marketratesinsight.com


Financial Institutions Find Value In Time Off Programs

KANSAS CITY, Kan.-As a very slow and modest upturn in the U.S. economy is becoming evident, banking and finance companies across the country continue to search for ways to reward employees despite the shrinking pay increase budgets and pay freezes seen throughout the industry.

The newly released 2010 Compensation Data Banking and Finance survey results show that exempt employees with less than one year of service earn an average of 6.8 vacation days, while non-exempt employees earn 5.4 days.

Almost 60% of the banking and finance companies offering paid vacation to employees use years of service to determine the number of days an employee can accrue. Exempt employees with 5 years of service average 14.3 days of vacation, compared to those with 10 years of service, 17 days. Employees with 20 years of service have 21.3 days of vacation. Both exempt and non-exempt employees are granted an average of 3 personal days per year. Exempt employees are granted 9 sick days per year, while non-exempt employees receive 8 days.

"In retaining top employees, many organizations are finding enhancements to time off programs may be a viable alternative to granting pay increases," said Amy Kaminski, director of marketing for Compdata Surveys, a pay and benefit survey data provider. "Until effects of the economic recovery can be felt, it will remain important for companies to be creative and make the most of their compensation budgets."

While only half of banking and finance companies allow carryover of vacation days from one year to the next, 95% of those place a limit on the number of days that can be carried over. Compensation Data 2010 Banking and Finance shows exempt employees can carry over up to 19.5 days of vacation, while non-exempt employees are allowed to carry over up to 19.3 days.

For info: www.compdatasurveys.com




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