I just read an American Banker story on Huntington Bank’s new DDA overdraft policy. In short, the bank gives you a day to bring your account current before charging any fees. At first it seemed less than my local bank does for its clients (good customers’ fees are waived automatically), but then I realized that the difference is both dramatic and inspiring. It represents a chance to completely change the dynamic between banker and customer. It is a chance to create a customer experience that will build a lasting, loyal relationship. Here’s how…
Think about the correspondence you receive from your bank. Statements—it’s time to reconcile my account. Privacy Statement—will they sell my information to someone new? Overdraft Letter—it’s too late to do anything about that, so I guess I’ll pay the fee. Advertisements—what do they want me to buy now? In short, the correspondence is important, but never pleasant. In fact, most consumers don’t enjoy managing their finances; it is something they endure to fund the parts of their life they enjoy. Against this backdrop, how can a bank be fun, be a friend, even be trusted as an ally (no pun intended). Region’s has a great ad campaign that makes shaking cans of change look fun, but if most Americans dread discussing finances with their spouse, how fun can it be?
Enter Huntington. When you overdraft, they send a text message the next morning to let you know. If you bring your account current by end of business, there are no fees. How is this different? In a delightfully subtle way, using near-instant communication puts the message ahead of the penalty. The bank takes the role of advocate, advisor, even friend, by helping the customer avoid the fee. Think of it like a personal phone call from your community banker 80 years ago. “I see you’re a little short on your account today. Well, this could happen to anyone. Can you set it right by close of business? Oh, good. I think we can avoid any overdraft fees then. Yes, it’s good to talk to you too.”
Suddenly Huntington bank has changed the tone of their relationship and become a trusted partner in their customer’s financial life. It’s no wonder that they’ve seen positive responses. They are now the bank that put their customers’ success ahead of their fee generation.
As you consider how to restructure your deposit account program to remain profitable in spite of new regulations, remember that demand deposit accounts have been and can continue to be the foundation of a healthy, profitable relationship. Focusing on providing a value to the consumer in new ways can differentiate you from the competition. Just remember that it is less about the novelty of the technology and more about how it can benefit your customer experience. Kudos to Huntington Bank for publically setting the standard for the industry.
