Over the years, retail banking has gone through various product cycles that disguise the costs of providing checking account services in different ways. Most recently banks have been offering “free” checking that was subsidized by signature debit card interchange and overdraft fees. With the recent changes in regulations and the avowed regulatory goal that banks must offer products that consumers can understand, Bank of America is moving to a new product structure that is based on “fair value exchange” between the bank and its customers. In a recent interview Susan Faulkner, Deposit and Card Products Executive discussed their strategy.
Based on this feedback from customers, we developed four “solution packages” that we are now testing in Georgia, Massachusetts and Arizona. At Bank of America, we think that what our customers want goes beyond checking accounts. Changes in the economic and regulatory environments have changed the way that customers bank. They want four things from their bank: easy, clear and straightforward products; secure products; the ability to bank where they want; and a fair value exchange. We provide customers with a set of values and, in return, they do more business with us.
“Bank of America Enhanced Solutions” is for customers who want multiple accounts with different benefit features and rewards, and they want choices in how they pay for those accounts. “Bank of America Premium” is for customers who want multiple interest-bearing accounts and who are beginning to think about their investment opportunities. They want to expand beyond basic services and start tying their investment relationship with their banking relationship.
In this value exchange, we reward our customers for bringing us more of their business. Going beyond the simple promotional offers, we’re introducing a new benefits program called “Platinum Privileges” that recognizes customers who bring us more of their banking and investment needs. “Platinum Privileges” helps us deepen our relationship with customers and provides them with priority service, preferred pricing and product offers.
For more information on Bank of America’s strategy and product rollout from the initial test markets, read the interview in Banking Strategies Daily: http://www.bai.org/bankingstrategies/product-management/deposit-products/fair-value-exchange-for-the-dda
To read what Wells Fargo is doing on checking fees: http://www.tradingmarkets.com/news/stock-alert/wfc_wells-fargo-to-end-free-checking-offers-july-1-wachovia-will-continue-its-policy-until-fall-2011-994091.html