In 2010 when Reg E came into effect as part of Dodd-Frank, banks scrambled to implement new systems to manage the overdraft opt-in requirements. The bank wanted to make certain that its customers that really needed overdraft protection were safeguarded as well as protect the non-interest fees that this valuable service generated. Already a FI Works client, the high-performance community bank asked if there was anything the platform could do to help.
FI Works was able to define a specialized campaign to manage the opt-in process and meet the Reg E requirements. The Reg E opt-in campaign was set up in just a couple of days and was executed over just two weeks. A key to the success of this effort was to use the FI Works platform to first target customers that use overdraft protection and then to target customers that would benefit from the service.
Campaign details of how it worked.
FI Works performed analysis to generate a list of priority customers for the frontline bankers to call. The system generated online task lists and tracked the bankers’ calling activities against the opt-in rates for the customers they contacted. The details of the campaign are outlined below:
Solving the Data Dilemma
Collecting Opt-in and Overdraft Data from the Cores
The FI Works software platform was already in place so the process of consolidated customer data from the bank’s core systems was already happening on a daily basis. This made the overdraft and debit card information needed to run a targeted opt-in campaign available from the get go.
“While overdraft opt-in is not a hot topic now, it was when the Reg E deadline was looming. This campaign demonstrated how fast we can respond to new issues.”
Keith Henkel, CEO, FI Works
Making Intelligent Targeting Easy
Prioritize Customers Who Use Overdraft Protection
Using its analytics engine, FI Works found all the people that were previously using overdraft protection on debit card transactions. For the first phase of the opt-in campaign a task list of these individuals was generated for each banker to contact via phone. The bankers explained the value overdraft protection on their account would provide, the fees involved and described the opt-in process required by the regulators.
Target Customers Likely to Need Overdraft Protection
Next, the campaign targeted debit card customers that were previously overdrafting on their accounts. Bankers received a task list to contact these people and explain how this service would help protect them and what they needed to do to opt-in.
Overdraft protection is a service that when a person needs it they REALLY need it. Within 2 weeks, the bank made sure their customers were covered.
Driving High-performance Behavior
Dashboards Prove Campaign Attribution
The bank’s FI Works account representative set up a dashboard to track the opt-in campaign activity, opt-in rates that could be contributed to the banker’s outreach efforts, and how these results translated in the real dollar value for the bank.
Avoiding Lost Revenues & Generating New Revenues
Based on the customers that opted in over the two week campaign, the bank was able to quantify (in the millions of dollars) the service fee revenue that would be lost if these customers had not been contacted. The ability to act fast and feed bankers with the customers that would want to hear from them about the opt-in requirements paid off for the bank and its customers. The bank was also able to attribute $362,000 in new annual revenues from this campaign.
Fast, No-cost Solution to Reg E
While other banks were running around implementing new systems – some costing hundreds of thousands of dollars – this bank was able to use FI Works at no additional cost to solve the problem in just a couple weeks. This type of opt-in campaign is also repeatable – the bank can periodically assess debit card customers to look for indications that overdraft is something that they should be using.
The Proof is in the Numbers
- 2 Day Set-up
- 2 Week Campaign
- 90% Opt-in for Targeted Accounts
- $362K in New Annual Revenue