Three-Fourths of American Households Are Banking Online
BROOKFIELD, Wis.-Over 63 million American households routinely pay their bills online and use other online banking products according to survey sponsored by CheckFree. The 2008 Consumer Banking and Bill Payment Survey showed that more than 75% of homes that have the Internet use the web to pay their bills and eschew writing checks.
51% of survey respondents cited the environment as a reason why they chose to view and pay bills online; 44% said that saving time and gaining control over their finances was a reason as well. Paying bills by check fell to their lowest level in six years amongst households with the Internet, accounting for only 31% of the total volume of household bill payments-down from 34% in 2007.
Americans are also becoming more confident in the security of such online services as only 13% of respondents in the latest survey cited online security as the top reason for not using the online bill payment service, down from 17% last year.
"As more consumers gain experience and become more comfortable using the Internet, their confidence in online security grows, we see an increase in the adoption of online banking and bill payment services," said Todd Lesher, division president of CheckFree electronic banking services, now part of Fiserv Inc. "For a minority of users who haven't used the Web as long, we see that security concerns remain a significant barrier to online banking and bill payment adoption."
What Customers Want From Their Financial Institutions
BELLEVUE, Wash.-Bank customers and credit union members say that they are generally satisfied with the overall experience they receive when they visit their branch, but a recent study found there is more that account holders want that could help financial institutions better serve them in today's unpredictable banking environment.
A survey conducted by Coinstar Inc., in partnership with Kelton Research, said 43% of bank customers say they'd prefer a change of environment at their financial institution, modeling it after retailers such as premium coffee shops or apparel stores known for personal shoppers and exceptional service. And while they might want a different atmosphere at the branch, 33% of bank customers don't want their bank to know them by name, but 67% still like that personal touch. Two out of three bank account holders would much rather stand in line for a bank teller than for an ATM.
According to the poll results, 50% of bank customers would take advantage of financial or related services not traditionally provided by their branch if they were offered. Legal advice and financial planning were among the most desired.
When survey respondents were asked about using non-traditional banking services if offered by their financial institution, many liked the idea of "one-stop shopping" at their branch. Both bank customers and credit union members agreed on their top choices for these services, which included self-service coin counting (bank customers 57%; CU members 62%); postal services (46% for both groups); and computer and printing services (bank customers 30%; CU members 35%). Other services of interest to respondents included a snack bar, Wi-Fi, neck and shoulder massage, and a supervised play area for children.
For info: www.keltonresearch.com or www.coinstar.com.
Card Portfolios With Rewards Programs Are More Profitable
CLEARWATER, Fla.-In a recent study of its members' credit card portfolio performances, Card Services for Credit Unions (CSCU) found loyalty programs are becoming an increasingly important part of credit unions' electronic payments strategies.
"More than 60% of total Visa credit card industry volume is generated on cards with rewards. In addition, rewards are the second-most important factor in a cardholder's selection," said Robert Hackney, CSCU's president.
In 2007, compared with portfolios without rewards, CSCU portfolios with ScoreCard rewards, on average, experienced:
* 16.94% higher average account growth than those without rewards
* 4.8% more active accounts
* 27.8% higher usage
* 36.6% higher volume per account
* 20.4% higher average balances
* 18.3% higher total revenue per account
The company cited SCE FCU in Irwindale, Calif., which has $430 million assets and more than 41,000 members, for seeing the following results:
* Tripled its Platinum Rewards accounts
* Doubled outstanding balances
* More than $1,000,000 in balance transfers and cash advances
* Doubled interchange income
For info: 888-930-CSCU (2728) or www.cscu.net.
Defining 'Predatory Lending' 1st Step Toward Solving Problem
LOGAN, Utah-There is not a universally accepted definition of predatory lending by policy makers, regulators or people involved in the mortgage business, making finding solutions difficult, according to a new study.
Researchers led by Lucy M. Delgadillo, of Utah State University, found the absence of a legal definition of predatory lending impedes efforts to design regulations to remedy it. Further, the study said differences exist among what constitutes mortgage abuse, mortgage fraud and predatory lending. The study interviewed mortgage lending professionals, policy makers and regulators, and is published in the new issue of Journal of Consumer Affairs.
According to the study, the oft-repeated term "predatory lending" carries a wide variety of meaning in the mortgage market, depending on the context in which it is used. However, the researchers argued, without a clear and legal definition of what predatory lending is, no one can quantify its true prevalence, and public policy can't assess what would be effective measures against it.
Based on the study's participants, targeting borrower vulnerabilities and lending more than what borrowers can afford both were seen as specific predatory lending practices.
For info: lucy.delgadillo@usu.edu or www.blackwellpublishing.com.
