In the Celent report Reg, Reg, Go Away: Sorry Banks, They're Here to Stay, I laid out a stark landscape for checking accounts due to the implications of Reg E. Revenue will drop and profits will drop likely moving into loss. What should banks do? A few of the options were:
- Raise price
- Create bare bones accounts
- Create bundles
- Reduce cost
Bank of America has a clear strategy. They have indicated that they will not go on an opt-in campaign for one time debit and ATM transactions. This is in great contrast to JP Morgan Chase who is aggressively pursuing opt-in. Bank of America is pursuing a number of other strategies. One, laid out in the report is a small business bundle: "Bank of America's Small Business Checking Bundle includes a Business Checking Account, a personal checking account for the business owner, and no cost so long as the customer uses his Visa debit card once a month." And now
American Banker reports that they are working on developing a bare bones account with fees for value added services. They just introduced a fee for printed statements for certain accounts in Georgia, clearly a trial for larger geographies. Reg E is a game changer in retail banking and banks need to come up with some proactive response, as Bank of America and JP Morgan Chase are doing. What is your bank doing?
