The Truth About Overdraft Privilege Programs

Posted on Tue, Aug 02, 2011

Critical success factors and best practice strategies deliver overdraft privilege programs that satisfy you, your accountholders, and your examiner.

Of course all overdraft programs carry risks. In today’s environment of increasing consumer protectionism, community banks and credit unions walk a fine line in offering overdraft services to their customers and members. Clients often ask us how to increase their non-interest income while managing the financial and reputational risks associated with overdraft privilege programs.

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At Pinnacle our experience with more than 1,000 banks and credit unions nationwide has proven that your institution’s customer retention strategies have a direct impact on your income. And we’ve witnessed time and again how income can increase when a financial institution earns the trust of its customers and members. We know that for every customer you lose, you have to go get another one, so we’ve developed “critical success factors” and best-practice strategies, along with tools that help you retain those customers and get them back on their financial feet rather than write them off. We work closely with our clients from the beginning to establish limits that optimize risk versus reward. 

Unlike traditional non-disclosed, matrix-modeled programs which can be confusing and unpredictable to consumers, Pinnacle’s overdraft privilege program is designed to be “consumer-friendly.” As a completely disclosed, fee-based privilege, your accountholders can rest assured you’ve always got them covered, and they know exactly what it’s going to cost.

When customers trust your commitment to their best interests, they appreciate the benefits of products and services like overdraft privilege. Because every charge-off is a lost customer, we work just as hard to protect the intangibles of a good customer relationship, including your reputation. In fact, even in these challenging economic times, our clients have maintained impressively low charge-off rates from year to year. When clients use the tools we provide, they help consumers learn money-management skills that pay off in ways that create deeper and richer banking relationships that have a positive impact on revenue and their bottom line.

Tags: Overdraft Privilege, banks, Pinnacle, local banks, Customer Service, success