The Bottom Line

Low-Cost Deposits: Banking’s New Battleground

Posted by Bob Koehler on Jan 29, 2019 11:30:00 AM

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It’s fascinating how quickly economic tides can turn. For the past decade, banks and credit unions have been focused on lending—first in shoring up the quality of their portfolios, then in attracting new customers to prudently expand loan activity. With rates now on the rise and net interest margins widening, however, attention has shifted to attracting and retaining deposits.

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Topics: Vendors & Contracts

Impact of Fiserv’s First Data Acquisition

Posted by Myron Schwarcz on Jan 22, 2019 2:36:30 PM

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The payments world woke to a jolt last Wednesday with the news that Fiserv had announced an agreement to acquire First Data in a $22 billion stock transaction, creating a fintech mega-firm. Most of the early coverage focused on the deal’s financial aspects, and on private equity firm KKR coming closer to finally turning the page on its massive 2007 buyout of First Data. However, we’d like to focus on the implications for customers of this new entity - particularly the financial institutions that comprise the bulk of its business.

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News from the Interchange Wars

Posted by Michael Carter on Jan 17, 2019 9:00:00 AM

Interchange Fees

Unless they work in the industry, most consumers who make a purchase with a card would struggle to define the word “interchange.” On the other hand, for the organizations who largely make it possible to use cards to make a purchase – issuers, merchants and processors – interchange is always top of mind.

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Topics: News

Trending in 2019: Tipping Points for Banking Breakthroughs

Posted by Michael Carter on Jan 9, 2019 12:00:00 PM

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At the start of each year, SRM publishes a list of the trends that are most likely to impact the financial services industry over the coming 12 months.  The trends we described are based on qualitative and quantitative research as well as from one-on-one conversations we had with bankers and thought leaders in the industry.

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Topics: Vendors & Contracts

The ABCs of RFPs for Financial Institutions

Posted by Patrick Goodwin, President on Dec 17, 2018 9:00:00 AM

Why You Should Bid Out Every Vendor Contract

As more financial institutions get serious about modernizing their core systems and revisiting opportunities surrounding contactless cards, our firm has noticed an uptick in the volume of requests for proposals (RFPs) issued as part of the vendor management process. SRM sees this as a positive development. In fact, we generally recommend that financial institutions regularly subject all their supplier relationships to an RFP process. 

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Topics: Vendors & Contracts

The Promises of Technology in Your Next Strategic Sourcing Decisions

Posted by Michael Carter on Dec 6, 2018 9:00:00 AM

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Sometimes it seems as if all there is to be said about financial institutions and their response to the digital age is that they are woefully behind and show little sign of “getting it” in the near term when making strategic sourcing decisions.  Certainly, banks and credit unions have struggled with the unique challenges of serving consumer that increasing live their lives through the ubiquitous devices that are available to them. 

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Topics: Strategic Sourcing, Technology

How Hitting the $10 Billion Threshold Impacts Vendor Management

Posted by Myron Schwarcz on Nov 27, 2018 9:00:00 AM

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Numeric milestones can be great opportunities to celebrate achievement and build team morale. Asset growth is usually a sign of health and prosperity, and attaining thresholds like $1 billion or $5 billion in assets are certainly momentous occasions for many financial institutions. Reaching $10 billion, however, can bring mixed blessings.

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Topics: Vendors & Contracts

Think Through Your ATM Strategy While Tackling Windows 10

Posted by Mark Mrva on Nov 14, 2018 9:00:00 AM

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As of January 2020, Microsoft will no longer support Windows 7. This event is creating some interesting conversations at financial institutions concerning their ATM strategy. Fourteen months may sound like the distant future, but time is already tight if banks and credit unions wish to avoid a costly, tactical reaction to the sunsetting of Windows 7, as opposed to a more strategic choice with upsides for account holders.

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Topics: Vendors & Contracts

How to Run an RFP for Your Digital Banking Strategy

Posted by Bret Herbert on Nov 6, 2018 2:15:00 PM

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In years past, soliciting digital proposals was a fairly straightforward exercise of reaching out to digital banking vendors and bill payment solution providers. However, things have gotten significantly more complex for financial institutions as touchpoints like mobile must be considered, not to mention P2P, self-service card controls, and advanced cash management options for business customers. Expectations for seamless omnichannel capabilities have increased as well.

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Topics: Vendors & Contracts

How Do You PAU? Optimizing Your Debit Card Program

Posted by Bob Koehler on Oct 31, 2018 10:00:00 AM

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Most bank and credit union leaders are familiar with ways to optimize their credit card programs, yet surprisingly few of them apply any transferrable techniques to their debit portfolios. Debit interchange is the first or second largest component of non-interest income for most financial institutions, so even nominal improvements can drive big benefits. Although credit card purchases generate more interchange on a per item basis, the reality for many smaller institutions is that they have more tools at their disposal to influence debit use.

The same PAU metrics (Penetration, Activation, Utilization) familiar to credit card program managers can be applied to debit. Let’s look at how these concepts can improve P&L:

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Topics: Vendors & Contracts