Under the Microscope
Credit Card Holders Have Upper Hand In Negotiations
ATLANTA-A credit card study by Synergistics Research found one-third of card users report they have at some point asked one of their credit card providers for a lower interest rate to keep them as customers.
The national Internet survey, entitled "Credit Cards: Marketing Warfare," was conducted with 1,000 credit cardholders age 18 or older. More than four in 10 revolvers and about one-quarter of convenience users have asked for a rate reduction. Slightly more than three-fourths of those asking for a rate reduction report they were successful.
About one-tenth did not get a lower rate and canceled their card. Overall, nearly nine in ten (89%) of those who asked for a lower rate either got a lower rate or canceled their card. Genie M. Driskill, chief operating officer for Synergistics, a financial services marketing research company based here, noted the portability of the credit card account has created a more volatile market for the product, adding, "Now, consumers are negotiating rates. Most are successful; those that are not just say no by canceling their cards."
For info: www.synergisticsresearch.com
Look For Global Shift In Financial Services In 2007
NEEDHAM, Mass.-In 2007 and beyond, the global financial services industry will increasingly grapple with three major strategic shifts: reinventing financial services at its core, repurposing financial services relative to the global diversity of a changing customer base and helping restore confidence in an uncertain world.
These are among the findings from financial services consultancy TowerGroup, which examined the top business drivers, strategic responses and technology priorities that will fuel the global financial service industry in 2007.
"The global financial services industry is changing in response to tectonic shifts in marketplace and business dynamics," said Guillermo Kopp, vice president of TowerGroup Cross-Industry research.
"Traditional markets are saturated with product and service options. The maturation of established customer segments is limiting traditional market opportunity. Both customer satisfaction and loyalty are being eroded by competition from traditional and nontraditional sources and industries."
Kopp said fundamental innovation-based on real-time transactions, interconnected services, advanced customer analytics and business intelligence-is critical for financial services institutions. "Understanding core business drivers, strategic responses, and technology initiatives for 2007 and beyond will help financial services executives embark on the dialogue regarding innovation that each institution must have relative to its future."
For info: www.towergroup.com
Small Businesses Go Far Beyond Mom And Pop
BIRMINGHAM, Ala.-To accommodate the needs of small businesses, financial institutions must understand the traits associated with the owners, according to a white paper from Bancography.
The consultancy said the "Mom-and-Pop" stores of yesteryear have given birth to a vast array of modest-sized companies and sole proprietorships that-in terms of sheer quantity-have come to dominate the business landscape.
Of greater importance to credit unions, Bancography said these small businesses have special financial needs banks too often ignore. The company said the white paper gives updated statistical information on the diverse demographics of small businesses, the goals and expectations of their owners, and what they are looking for in terms of financial assistance.
Bancography said the white paper offers a variety of ways to meet the needs of small businesses.
For info: 205-251-6227 or research
Will 2007 Be The Year Of 'Electronification?'
NEEDHAM, Mass.- According to new research charting the adoption of Check 21 (The Check Clearing for the 21st Century Act), 2007 will be another significant year in the ongoing "electronification" of paper checks. TowerGroup is projecting that monthly check image exchange volume to surpass paper check presentment volume by the end of 2007, to become the dominant method of check presentment in 2008.
"Most U.S. banks have now implemented the software and processes to participate in check image exchange," said Robert Hunt, research director in the Retail Banking practice at TowerGroup and author of the research. "More important, the largest banks have completed limited volume processing and are now ramping up their image exchange transaction volume. Although factors such as ACH check conversion and electronic bill payment growth will impact the number of checks presented in 2008-09, it is clear that by 2009 paper check presentment volume will be minimal."
Among the other findings:
* Following introduction of Check 21, banks concentrated efforts on reducing check float by using substitute checks and introducing remote deposit products.
* Although image exchange networks were available to facilitate image-based electronic presentments, a number of factors resulted in the bulk of image cash letters being converted to substitute checks rather than presented electronically.
"We see 2007 as the year of image exchange," said Hunt. "The growth of image exchange volume will accelerate throughout 2007 as more banks agree to receive image cash letters."
For info: www.towergroup.com.