Fiserv Inc. is giving financial institutions what is says are more opportunities to recoup lost revenue stemming from regulatory and legislative changes by providing an enhanced rewards platform for their customers who use multiple products and services.
The Brookfield, Wis.-based financial services technology company has added features to its year-old Relationship Rewards for Premier bank platform, which helps reward customers for their various relationships with an institutions them.
The enhancements will help the institutions manage and expand revenues in light of marketplace changes that may reduce the profitability of their credit and debit card programs, says Doug Shum, Fiserv bank solutions product manager of risk and performance. Among the regulations and new laws that could affect such operations include Durbin’s ongoing legislation to cut interchange fees for debit cards, as well as the Credit Card Accountability, Responsibility and Disclosure Act, which limits fees on credit cards.
The patent-pending design of the latest version of Relationship Rewards for Premier enables banks to choose how to reward cost-saving customer behaviors, such as receiving electronic statements or using mobile banking or bill payment. Rewards may include premium interest rates, refunded fees or waived service charges.
The enhanced program also enables financial institutions to combine Relationship Rewards with Fiserv’s UChoose initiative, which rewards customers for debit and credit card transactions, Shum says. The UChoose platform enables bank customers to redeem points online for goods and services, such as gift cards, merchandise, travel and cash back.
Rewarding customers for using multiple bank products and services will help retain customers, particularly among smaller institutions, one analyst says.
“It makes an enormous amount of sense,” says Dennis Moroney, research director at TowerGroup. “Banks in general paid lip service to providing [rewards to customers for using multiple banking products], but it’s been the community banks and credit unions, which Fiserv serves, that have led the way.”
Developing deeper relationships with customers is one way financial institutions can recoup revenue lost from the anticipated regulation on debit interchange, Moroney says. Smaller institutions have an opportunity to provide more to customers who are moving away from larger institutions that are cutting services and rewards and adding fees, he adds.
“The product is great to the extent that Fiserv can deliver on it,” Moroney says, noting Fiserv has a long history of having good operational execution. “It’s very important for smaller institutions who value high touch-points [with customers] and high satisfaction from customers because every customer is more valuable these days.”
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