The April edition of Merkle’s Financial Services Industry News, is a compilation of insight and recent developments within the industry, combined with thought leadership from Merkle’s expert strategy team.
This edition explores how some banks are adapting to the changing landscapes in technology, payment and lending, and the impact of non-traditional providers. Additionally, a link to a recent Merkle webinar, presented in conjunction with Citizens Bank, titled “Citizens Bank Case Study: Expanding Reach in the Digital Age – Retooling for Growth” is highlighted in the thought leadership section. Kristin Mollerus, Vice President, Director of Agency Services at Citizens Bank, and Merkle’s Mackenzie Smith, Director, Agency Services, and Sunil Rao, Director of Digital Analytics teamed together to present this educational case study that explores retooling systems, processes, and marketing strategies for growth through data, analytics, and digital technology.
The webinar focuses on expanding the reach and impact of the Citizens Bank customer engagement strategy and delves into industry and consumer trends. For example:
- Creating the need for immediate action with regard to the analytic, technical, and engagement core competencies required to compete in today’s digital world.
- How Citizens Bank specifically leveraged and expanded existing assets to interact with and acquire desired customers (including actual results).
Merkle is pleased to continue to engage our customers and contacts with compelling thought leadership, along with products and solutions to solve real-life financial marketing challenges. We hope that you enjoy this edition of Merkle’s Financial Services Industry News.
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This month’s edition includes the following topics:
- Interest Rate Overnight Averages
- General Industry: Banks Look to Enter the Lucrative Business of Check Cashing
Traditional banks are beginning to offer check-cashing services, which have long targeted low-income or unbanked individuals. Although the business has been dominated by local check-cashing stores, adding the service could potentially help banks generate millions in additional fee income.
- Technology & Innovation: Banks’ Fintech Fight With Apps Heats Up
Banking is heading to the smartphone at a rising pace, and more than 90 percent of executives surveyed for a new report by Capgemini and Efma indicate that the pace of change continues to accelerate. However, fewer than 18 percent of the retail banking executives polled plan to acquire fintech firms or technology.
- Cards & Payments: B of A Lets Online Banking Customers Enroll in Visa Checkout
As part of an effort to simplify payments, Bank of America said it will begin pre-selecting eligible Visa cards owned and used by customers to be enrolled in Visa Checkout directly from B of A Online Banking. This marks the first time a bank has integrated cards into Visa Checkout and provided “seamless” enrollment through its site.
- Consumer Lending: ABA Survey: QM Lending Dipped in 2015
The American Bankers Association’s (ABA) latest Residential Real Estate Survey reveals that the percentage of Qualified Mortgages (QM) originated by banks fell from 90 percent in 2014 to 86 percent in 2015. Bankers noted that, in most cases, borrowers’ debt-to-income ratios prevented loans from meeting QM standards.
- Small Business: Chase Quietly Launches Its Online Small-Business Loan Platform
JPMorgan Chase quietly launched its digital lending platform for small businesses on a limited basis last week, following months of behind-the-scenes work with OnDeck Capital. The partnership involves OnDeck providing its technology to Chase.
- Investments & Wealth Management: Goldman Sachs Finally Moves Into Retail Banking
Goldman Sachs is entering retail banking, as it started taking online deposits as low as $1 for savings accounts on April 18. The new retail banking arm, GS Bank, comes about eight months after Goldman announced that it would acquire GE Capital's online deposit arm, giving it about $16 billion in accounts and certificates of deposit.
- Insurance: Life Insurance Activity Ends Strongest Quarter
Ending the strongest quarter yet of the current expansion, U.S. application activity for individually underwritten life insurance was up 4.9% in March year-over-year, all ages combined, according to the MIB Life Index. Life Insurance application activity was up 5.4% Q1-2016 as compared against Q1-2015.
- Regulation & Security: EMV Credit Card Adoption Edges Higher: MasterCard
MasterCard reported a jump in the share of chip-enabled MasterCard credit cards from 59 percent in the fourth quarter of 2015 to 67 percent in the first quarter of 2016. In addition, the number of U.S. merchant locations accepting EMV chip card payments rose almost 50 percent from 800,000 to 1.2 million over the same period, according to MasterCard.
- Economy: Mortgage Rates for 30-Year U.S. Loans Drop to Lowest Since 2013
Freddie Mac reported on April 14 that the average 30-year fixed-rate mortgage dropped to 3.58 percent during the week from 3.59 percent the prior week, marking the lowest level since May 2013. The average 15-year fixed mortgage fell from 2.88 percent to 2.86 percent over the same period.
- Thought Leadership Webinar: Citizens Bank Case Study: Expanding Reach in the Digital Age – Retooling for Growth
Join thought leaders Kristin Mollerus, VP, Director of Agency Services, Citizens, and Merkle's Mackenzie Smith, Director, Agency Services, and Sunil Rao, Director, Digital Analytics, as they discuss how Citizen’s Bank is retooling for growth through data, analytics and digital technology to expand the reach and impact of their customer engagement strategy.