Bank Acct Service Fees Down $2 Billion In 2011
SAN ANSELMO, Calif.-The amount of money banks generated from fees on deposit accounts decreased from $36.2 billion in January of 2011 to $34.1 billion in December of 2011-a decrease of $2.1 billion or 5.8%, according to analysis from Market Rates Insight.
Since the beginning of the last recession, MRI said income from service fees on deposit accounts dropped from $39.2 billion in December of 2007 to $34.1 billion in December of 2011-a decrease of $5.1 billion or 13%.
Income from service fees on deposit accounts declined despite an increase in the total amount deposited in banks. MRI said total deposits at FDIC-insured institutions increased by $800 billion in 2011-an increase of 8.5%. The increase in total deposits since the beginning of the recession in December of 2007 has been $1.8 trillion, from $8.4 trillion to $10.2 trillion-an increase of 21.4%. Normally, MRI said an increase in total deposits leads to an increase in the service fees associated with deposit accounts due to increased level of depository activity. However, in the last five years the relationship has been inverse: an increase of 21.4% in total deposits vs. a decrease of 13% in service fees on total deposits.
Service fees on deposit accounts include fees related to: the maintenance of deposit accounts such as failure to maintain specified minimum deposit balances, the number of checks drawn on and deposits made to deposit accounts, checks drawn on so-called "no minimum balance" deposit accounts, withdrawals from non-transaction deposit accounts, closing of savings accounts before a specified minimum period of time has elapsed, accounts inactive for extended periods of time or which have become dormant, deposits to or withdrawals from deposit accounts through the use of automated teller machines or remote service units, the processing of checks drawn against insufficient funds, or "NSF check charges" a bank assesses regardless of whether it decides to pay, return, or hold the check, and issuing stop payment orders, certifying checks, and similar services.
"These findings suggest the potential for fee income from traditional services is gradually diminishing," said Dan Geller, EVP at Market Rates Insight. "Institutions need to start offering value-added services that consumers want and need and are willing to pay for."
For info: www.marketratesinsight.com
Fraud Tools For Consumers Critical, Survey Says
CHICAGO-Financial institutions should be putting fraud monitoring tools in the hands of consumers for the highest levels of security, Authentify determined when analyzing the results of the 2012 Faces of Fraud Survey.
The annual study of banks, conducted by Information Security Media Group (ISMG) and sponsored by Authentify and others, seeks to discover the latest fraud trends and how institutions are fighting back.
The survey results indicate that while bank customers are not the root cause of fraud, they actually are one of the top sources for fraud detection. Banks responding to the survey reported that the three leading causes of fraud they experienced were card-not-present (CNP) (56%), data breach at a retailer or processor (53%), and POS skimming (47%)-all root causes over which the consumer has very little control. However, when asked how a fraud incident was usually detected, 82% of banks said that it was when a consumer notified them.
For info: www.bankinfosecurity.com/surveys.php?surveyID=11