non-interest income and future business models
DESCRIPTION
Consumers are willing to pay for services that they find either adds convenience or delivers value. In this podcast and presentation from the 2013 NAFCU Annual Conference, Dave Schneider, Brent Dixon, and Paul Muse discuss how to expand your credit unions credit and debit opportunities and explore innovative products that can help guide your future credit union operations, including new approaches to increasing penetration, activation, and usage of the fundamental card. Also, learn to leverage new payment options that will appeal to Gen Y consumers, including Internet PIN debit, PINless at the point of sale, and payments and delivery of service through mobile.TRANSCRIPT
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Non-Interest Income and Future Business Models
Strength or Weakness?
Opportunity or Threat?
Change brings new opportunities for credit unions!
• As it relates to Non-Interest income, for 1st
Advantage, it’s not about a new idea but about improving performance with existing structure. – Improve collection of current fees.
– Increase performance of investment services, mortgage fees, insurance services, card activity, & small business relationships.
– Regulation changes bring focus, not distraction.
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People Helping People
• Credit Unions offer a better option for consumers when it comes to non-interest income as it relates to fees.
• Our culture sets us apart in relation to how we work with members regarding fee situations.
Business Models• Collaboration and CUSOs work well when people
align with the culture of the credit union. At 1st
Advantage, we believe in having control and giving direction when it comes to employees of a CUSO.
• If you are not offering non-interest income products and services or not having good performance, it is time to ask why.
• We need to leverage our loyalty and trust to form win-win situations.
• Doing nothing and expecting better or similar results is no longer an option.
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Non-Interest Income and Future Business Models Panel
Presented by
Dave SchneiderPULSE
Annual Credit Union Interchange Revenue Per Active Consumer Debit Card
3rd quartile
$74
2nd quartile
$88
4th quartile
$63
1st quartile
$108
Best-in-class
Source: 2013 PULSE Debit Issuer Study
The Debit Opportunity
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Consumer Debit Interchange, Blended (Signature & PIN)Average ticket = $37
Business Debit Interchange Blended (Signature & PIN)Average ticket = $90
$0.37(105 bps)
Source: 2013 PULSE Debit Issuer Study
Interchange Advantage
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Exempt Credit Unions
$0.23(64 bps)
Regulated FIs
$1.69(193 bps)
Exempt Credit Unions
$0.27(34 bps)
Regulated FIs
+60%
+525%
New Approaches to Increasing Penetration, Activation and Usage
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Target Gen Y• Heavy debit users
• Budget conscious
Expand debit use• Internet PIN debit
• PINless POS
• Mobile payments
• Merchant loyalty/rewards
• P2P/A2A
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Case Study:Randolph-Brooks FCU
• South-central Texas CU
• More than $5 billion in assets
• “Really Free” Checking– No monthly service fees
– No minimum balance
– Free checks
– 10¢ cash back on all debit purchases, including PIN debit
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Source: www.rbfcu.org
“Dime Every Time” Success
• Paid out $7 million in 2012
• Program has grown each year since its inception in 2007
• RBFCU has returned more than $29 million to members since 2007
• CU membership has increased more than 60% over the period
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$4 million
$7 million
250,000
400,000
“We know that members enjoy the cash back and therefore choose to use the card more.”
Randolph-Brooks FCU