Customers Want Free Checking, but Will Pay for Frills
Essay by daveelance • November 5, 2013 • Essay • 282 Words (2 Pages) • 1,410 Views
Memo to: Sylvia Vrh-Zoldos
From: Mary Gee
Subject: Summary of article, "Customers Want Free Checking, But Will Pay for Frills"
Date: August 7, 2012
As you requested, I've summarized Dan Geller's article "Customers Want Free Checking, But Will Pay for Frills" appearing in American Banker, July 27, 2012. A copy of the article is attached for your convenience.
In his article, Geller advises that there is an opportunity for banks to improve revenue by offering customers "lifestyle financial services". He supports his point with Market Rates Insight's (MRI's) latest study and concludes that there are two reasons for financial institutions to offer these services.
Emerging trends consumers willing to pay for
Changes in people's lifestyles and rapid technological innovations mean that customers are demanding more convenience and mobility, better digital security, and more media connectivity. Unlike traditional banking services, consumers believe these lifestyle services enrich their lives and are willing to pay for the convenience offered. Based on the MRI study, about 2/3 of consumers would use these services if they were available at their financial institutions.
Reasons to offer lifestyle services
Geller concludes there are two reasons for financial institutions to offer these services:
1. Based on the current environment, financial institutions have seen fees for traditional services drop. Fees for U.S. banks have been dropping for the last five years and this drop is expected to continue.
2. Consumers believe that lifestyle services make their lives easier and as these services become more common, consumers will likely do their traditional banking with a financial institution that offers lifestyle services.
If you require further information, I can be reached at marg@my.email.com. Thank you for the opportunity to summarize this article and I look forward to your feedback.
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