Building Loyalty and a Financial Cushion for Customers at Columbia Bank.
Scenario:
Bankers are always looking for new and better ways to stay ahead of the competition, increase non-interest income, and keep their customers happy. For Columbia Bank (Tacoma, Washington), keeping these strategic goals on a winning track meant the need for a service that would enhance customer satisfaction and increase profitability.
“We are always interested in new products and services that can benefit the bank and improve our customers’ experience,” said Avery Johnson, SVP of Branch Administration for Columbia Bank. “Melanie Dressel, our CEO, kept hearing about these overdraft programs at banking conferences she attended throughout the year and wanted to learn more about their capabilities.”
Columbia Bank has 36 branches and receives an average of 500 overdrawn checks each day. Creating a streamlined overdraft program capable of handling the current volume, as well as the anticipated increase that would come with offering overdraft protection was a huge undertaking. Ms. Dressel believed the potential increase in non-interest income and the competitive advantage of offering overdraft protection would far outweigh the work involved to make it happen.
Solution:
Choosing the Right Overdraft Program to Meet Columbia’s Needs
Part of Johnson’s research included talking to fellow bankers who already had an overdraft program and learning first hand the results of performance and profitability. He discovered that overdraft programs provided a great service to customers in addition to generating revenue for the bank. Johnson decided to take the next step and invite vendors to present their overdraft programs to executive management. “Choosing the right program is a matchmaking process, not just a search for the lowest price,” said Johnson. “The management philosophies of the bank and vendor need to mesh. The team was also looking for a vendor with financial stability, one that would be around in the years to come.” The vendor installation, integration support, training, and follow up were also top concerns to Columbia Bank.
Turning to a Trusted Name In Banking
Once the evaluation team assessed the presentations and proposals from the three vendors, Columbia Bank selected Sheshunoff Consulting+Solutions to install the Platinum Overdraft Program. This unique program is designed to give the branches all the features they need to better manage customer relationships and the collection process. In addition, the evaluation team was impressed with the detailed customer screens, automatic electronic reports, complete customer history, communication tracking, and scripts the software provides. “Columbia Bank knew that in order to stay competitive and reach their goal of greater profitability, they had to introduce a program that would make them more efficient and customer-centric,” said the SCS Revenue Enhancement Director. “Communicating to their customers and monitoring and tracking account activity were critical to the success of this program for Columbia Bank. They were also very conscious of the need to stay in regulatory compliance.” “The most significant thing Platinum Overdraft has done for our department is to drastically reduce item processing time and the work load associated with perusing the overdrawn account list. It has literally cut the time we dedicate to this process in half, making the customer service representative’s job more efficient,” said Johnson.
Results:
An Overdraft Program that Works for Columbia Bank and Its Customers
The Platinum Overdraft “no heavy marketing” philosophy was also important to the bank since they didn’t want to mass advertise this new service. Instead, Columbia Bank took a more personal approach and sent out letters to selected customers, informing them of the new service - giving them the option to participate. Platinum Overdraft was up and running in June. Within three months Columbia Bank saw the bottom line results and the staff was receiving positive responses from customers.
“In the three months since we’ve implemented Platinum Overdraft, our NSF income has increased by 50%,” said Johnson. “I must say, this was by far the smoothest conversion I’ve ever done, and I owe that to the experience SCS brought in to install their overdraft program.”