Expanding Beyond DDAs

by Edward O'Brien 0

As financial institutions evaluate ways toextend their reach to customers beyond simple checking and savingsaccounts, many are assessing how best to encourage customers toinvestigate and consider a wider variety of products andservices.

Much of their focus has traditionally been on demand depositaccount transactions, including deposits and withdrawals, directdeposit, and some bill-payment activities, because these are areasof immediate and frequent importance for customers.

With the annual costs to maintain a DDA estimated to be in the$200-to-$300 range and sometimes more, institutions are seekingways to reduce costs and to spread the costs over more transactionsand lines of business.

Increasingly, financial institutions are actively expanding theiroutreach to include conversations about loans, mortgages, wealthmanagement, and small business banking, when and where appropriate.This is not a transient, fleeting thought, but a measured responseto a realization that lending, wealth management, and smallbusiness banking are often some of the most profitable lines ofbusiness in a financial institution.

Many institutions are also redesigning branches to offer increasedopportunities for interaction and advice. The goal is to traintellers and other branch personnel to answer customers’ questionabout lending, investments, and insurance, and to enable wealthmanagement and/or small business customers to have discussions withthe appropriate subject matter experts.

With such an integrated approach across various customer types andlines of business, Financial institutions can now reach far moreprospects and retain more existing customers than was previouslypossible.Follow EdO’Brien on Twitter @ed_ob.

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