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Do You Have Solutions to Address the Urge to Splurge?

After more than a year of limitations on travel, cancellation of group gatherings, and restrictions on community interactions, consumers are ready to get back to pre-pandemic life. For many, this means increasing their spending to recoup the purchases and experiences they missed in 2020. According to a report by McKinsey & Company, more than 51% of U.S. consumers expect to spend more to treat themselves after months of pandemic fatigue.

However, this can be troublesome for individuals whose jobs were impacted by business closures or reduced hours—or who weren’t able to build a savings buffer over the past year. In these situations, the temptation to ‘revenge spend,’ as the trend is being called, can lead to financial difficulties that will negate the temporary joy of a COVID-19-recovery spending spree.

Community banks have gone the extra mile throughout the pandemic to improve the account holder service experience and support ongoing—and sometimes changing—financial needs. As the recovery gets underway, there is still a great deal of need among consumers regarding their financial well-being. At the same time, expectations for exceptional service standards remain high.

As the uncertainty continues, here are five areas to consider that can strengthen your account holder relationships while alleviating some of the stress they are feeling about maintaining financial wellness.

1. Get to know your account holders’ needs

Based on account activity, are you able to position additional products to your account holders? Do you have a systematic process for offering a link to savings or line of credit? Can your team easily determine if there is a need for account management counseling?

2. Commit to total transparency

Do your account holders clearly know how their transactions are handled if they have a brief financial shortfall? Are they aware of the different overdraft protection options available to them?

3. Boost employee confidence with effective training

Do you rely solely on your employees to carry the entire training load? Does your training strategy include leveraging trainers with specific expertise? Does it sufficiently support your employees’ different learning styles?

4. Eliminate uncertainty with consistent communications

Is the information about your overdraft service shared consistently, whether it’s by phone, chat, or in-person? Do your account holders clearly understand how the service works, including fee amounts, limits, and other available options?

5. Utilize proven tools and resources to ensure optimal results

Are there tools and resources in place for identifying changes to program usage? How often does your staff take the time to evaluate program policies and procedures? Do you have someone on staff who is keeping up with potential changes in the regulatory environment and class-action risk?

Transparent, consumer-focused service yields more balanced results

As the desire to return to normal grows, ensure you’re providing valuable services and advice that can help your account holders avoid risking their long-term financial well-being.

A fully disclosed overdraft service reduces the stress caused by a financial shortfall for your account holders, leading to stronger relationships. And, when it is maintained correctly, it can be a catalyst to help you grow your business.

JMFA is a WBA Bronze Associate Member.

By, Alex Paniagua