With renewal time coming around on both my homeowner's and my auto insurance, I decided it was time to go shopping. My home has been covered for years by a small Midwestern mutual that's got an office in my mom's hometown with which we've done business for decades, and the agent there had been clamoring for an opportunity to bid for my auto coverage, which has been with one of the bigger carriers whose ads alternately amuse and bore us nightly. I was thinking "you'll never beat their rates." But I called her up and went through the quoting process over the phone, and lo and behold, the small insurer not only beat the incumbent on pricing, but knocked about a third off my homeowner's. I also tried a couple of other big national firms, but they couldn't do better.
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A funny thing happened when major rating agency Standard & Poor’s (S&P) downgraded U.S. debt in early August of this year: The U.S. Treasury market rallied as global fixed income participants recognized that U.S. creditworthiness is as close to the mythical “risk-free” moniker as can be, at least in the real world. Shortly thereafter, another funny thing happened: While the SEC was already investigating the S&P relating to its rating of mortgage-backed securities, this aspect of the SEC’s involvement relating to CRAs received added press when the S&P downgrade came about.
Big banks have always managed their consumers’ accounts separately, almost forgetting that consumers have multiple product relationships. Payment products are managed separately from checking relationships, which are separate from mortgage relationships, which are separate from investment relationships. These different forms of customer business have traditionally been run as discrete profit-and-loss centers. Profit margins have now been cut on debit cards, and banks are raising fees on the cards and checking accounts; the rise in checking and debit card fees will further alienate customers at a time when consumer trust in banks is at an all-time low.
U.K. payments processor VocaLink has announced that it is abandoning its Single Euro Payments Area (SEPA) services, blaming "comparatively low" volumes for the project's instruments. The story can be found here.
In a recent Aite Group survey of bank ATM channel executives at 20 of the top 150 U.S. financial institutions, we examined the strategic, technological, and operational issues of the bank ATM channel.