If increasing fee revenue is a topic that’s on the table for your bank or credit union, consider building an overdraft opt-in campaign for your new and existing accounts. Non-interest income plays a big part in the overall growth and revenue a bank or credit union generates. So, sending a regular overdraft opt-in campaign to existing relationships and including it as part of your onboarding program for new account relationships is a good way to increase the number of customers or members in your overdraft protection program and stay compliant with Regulation E.
Regulation E requires that all financial institutions must give notice, in writing, explaining the overdraft service, give reasonable opportunity to opt-in to the service, to receive explicit consent for opting into the service, and to send confirmation of consent with information on the right to revoke consent at any time.
Some acceptable ways to obtain consent for overdraft opt-in can be by:
- Electronically
- Phone
- In Person
Before setting up your overdraft opt-in campaign, you need to be sure you have the proper collateral that is required to be in compliance with Regulation E. You will need to present each account holder with a document that thoroughly outlines the following:
- Each fee or fees associated with each and every overdraft. Be sure to mention exactly how much your bank or credit union charges for non-sufficient funds (NSF) and clearly communicate that in this document.
- Transaction categories that apply for your overdraft protection program. Under Regulation E, you’re only required to get overdraft protection consent for ATM or one-time debit card transactions.
- The time period each relationship has to repay the overdraft fee.
- Outline any possible circumstances in which the financial institution won’t cover an overdraft fee and the card or transaction could be declined.
Here are some ideas for executing this and how Core iQ can make this process quick and easy.
Existing Accounts
For existing account relationships, you can increase the number of overdraft protection opt-ins by doing an annual or bi-annual campaign that encourages your customers or members to consent to your program. This way, you can continuously grow the number of overdraft opt-ins and gradually increase fee revenue over time. To optimize spend savings, send an email campaign to those you have an email address for, and a postcard campaign to those you do not.
As an Onovative customer, you can automatically identify these relationships if you have Regulation E mapped into Core iQ. If you don’t, you can quickly and easily pull a list of these relationships using the customer or member matching identifier report using an external list. From there, you can instantly queue up your overdraft protection opt-in template and schedule your campaign in minutes. Not only that, you’ll be able to show the results of your print and email opt-in campaign with conversion tracking.
New Accounts
For new accounts, consider asking about overdraft protection consent during account open or sending a message about opting in as part of your onboarding process. If you have an email address for the new account relationship, send your opt-in message in an email, if not, send a direct mail postcard outlining the steps to opt-in to your overdraft protection program.
If you’re an Onovative customer, Core iQ’s cross-sell priority matrix can help you automatically send your overdraft opt-in email or postcard to new account relationships as part of your customized onboarding schedules.
Considerations for Content
If your goal is to encourage your relationship to opt-in to your overdraft protection program, you’ll want to include some content in your campaign that showcases the benefits of opting into your customers or members. Remind them that by opting into your program, they won’t have to experience their debit card being declined for transactions when they have non-sufficient funds. Also, consider providing advice on how to avoid overdraft fees and the best ways to ensure you don’t overdraft, but that you will be covered in the event that you do. Providing this type of advice will help build trust between you and your customers or members and increase the number of opt-ins to your overdraft protection program.
For more ideas on how to execute your own overdraft protection opt-in program or strategies for other targeted campaigns, contact me today.
