Regions Financial (RF) has finished rolling out a suite of alternative financial services, including check cashing, money transfer and expedited bill pay services, along with a prepaid card.
The program, called "Now Banking," is designed to broaden the services offered to current customers and to attract underbanked consumers, who don't have or don't regularly use traditional bank accounts.
"The segment that 'Now Banking' is targeting is the growing pay-as-you-go consumer," John Owen, senior executive vice president of consumer services at Regions, told American Banker in an interview on Wednesday.
Those potential customers include more than just the young, low-income or immigrant people who are generally considered the majority of the underbanked population, he says.
"It's not who you think it is. It's a segment of customers that choose to manage money and cash flow on a pay-as-you-go basis," says Owen, noting that over half of the customers using Regions check-cashing and related services make more than $50,000 a year. Over 20% of those people make more than $100,000 a year.
The Birmingham, Ala., bank announced on Tuesday that its new products are now available at all Regions branches, certain ATMs and online.
American Banker had previously reported on the products, which Regions started unveiling during a pilot program last summer.
Owen says the idea of offering services not typically found at banks was born out of a customer survey, which found that 30% of existing Regions customers had used those services in the prior 90 days. The survey also found that 41% of surveyed consumers said they were somewhat or very likely to use one of those products in the future.
"That was kind of an eye-opener for the bank," Owen says.
While it's early, Owen says consumer feedback thus far has been "very positive."
Customers "like having the flexibility and they like our price points," he says, adding that about half of the customers using the "Now Banking" products are existing Regions accountholders and half are not.
Roughly 5% to 8% of those new customers have signed up for additional services, like savings accounts, he says.
Regions did some on-the-ground research designing its products and pricing, according to Owen.
"My team and I went and shopped at competitor banks and the Wal-Mart Money Center. We went and spent time at major payday lending stores just to understand what the mechanics are and what the facts are," he says.
The bank charges 1% to 3% of the underlying check amount for check cashing, and 5% of the check amount for money orders. The Regions prepaid card costs $4 to buy and has a $5 monthly fee unless direct deposit is set up. Bill-pay services provided by Western Union cost anywhere from $4 to $20.
Regions also began offering short-term loans to existing customers back in May, before the "Now Banking" initiative began, says Owen.
Customers of good standing, who have done business with the bank for nine months or more, can borrow half of an upcoming direct deposit, up to $500, via an online platform.
Regions customers like that this product is private, easy and convenient, says Owen.
"We've had a lot of demand and enrollment," he says, adding that the bank is planning further modifications to that program in coming months.