Fiserv, Inc., a global leader of technology software solutions to the financial services industry, today announced a new Revenue Expansion Program which is a type of road-map solution designed to offer help to banks and credit unions that are affected by the new financial regulation: Regulation E. In November of last year, the Federal Reserve put out their final rule regarding the banking sector prohibiting banks and credit unions from charging overdraft fees on debit card purchases and ATM withdrawals unless they had consent from the customer to opt-in to their overdraft fees protection services.
The rules on Overdraft Protection took effect in July 2010 which will certainly impact financial institutions profit when it comes to overdraft fees. According to Mercator Advisory Group, depository institutions in the United States generate more than $31 billion per year in overdraft fees. According to Fiserv, about 20 to 55 percent of overdraft fees will affected by the regulation.
The new rules will forces credit unions and banks to create a different strategy to comply with new regulatory environment. Financial institutions need to find creative way to develop innovative products and services to offer their customers and this is where Fiserv’ Revenue Expansion come into play to help them address how Regulations E will impact them as well as the currently economic environment we live in. Banks now need to find new revenue sources to replace the ones that will be lost from Overdraft Protection Regulation.
Fiserv has come up with three areas that address Revenue Expansion for financial institutions: Cross-Sell/Customer Loyalty Products, New Deposit Products, and Customer Liquidity Products.
Source: company press release