SAN FRANCISCO--(BUSINESS WIRE)--Javelin Strategy & Research’s latest report uncovers the upward trend in bank fees for checking accounts over the past ten years across banks of all sizes. Today, bank consumers pay 26% more in basic demand deposit account (DDA) bank fees and 53% more for returns of deposited items than they would have in 2002. Javelin’s analysis of three checking account scenarios reveals that the most common DDA bank fee components - monthly account fees, in-network ATM fees, and out-of-network ATM fees - increased scenario costs more than 20% over the past five years.
Large banks typically charge higher bank fees for basic checking, while midsized banks charge less than two-thirds of the rate charged by the top ten banks. Consumers can evaluate FIs’ offerings, weighing fees for basic checking against access to the latest mobile and online banking technologies, which can help consumers reduce overall banking expenses.
While financial institutions (FIs) are charging higher bank fees to recoup lost revenue due to Durbin and other regulations, they are also offering value-added and technology-based services such as expedited payments, alerts, and mobile banking to meet consumers’ needs for convenience and flexibility. Javelin’s bank fees report identifies transparency as a key strategy for FIs to communicate with consumers about the fee structures as a way to empower - and retain - their most profitable customers.
“It’s important that banks be clear, transparent, and detailed when communicating with customers about fee-based services,” said Beth Robertson, CCM, Director of Payments Research at Javelin. “Consumers can then select those banking products and services that best meet their particular needs.”
“Consumers need to reset their expectations around bank fees and services,” said Jim Van Dyke, President, Javelin. “Larger FIs typically offer 24/7 multichannel convenience, while community banks and credit unions commonly offer free checking or lower monthly account fees and more personalized customer service. FIs can help consumers understand which specific banking services align with their financial behaviors to maximize the value of the services they use.”
Javelin’s The Cost of Regulation: The Necessity of Bank Fees report provides strategies and tactics that FIs can use to communicate information about bank fees in a positive - rather than punitive - light. The report is based on a review of bank fee data and entry level checking products offered at 30 FIs in three asset classes (top 10 consumer banks, midsized banks, and community banks).
Selected Key Report Findings – The Cost of Regulation: The Necessity of Bank Fees
- The average cost to FIs to maintain a checking account tops out at approximately $400 per year.
- Larger banks charge a nearly three times the average fee for basic checking than community banks.
- A small percentage of consumers regularly incur overdraft charges; less than one in ten consumers incur overdrafts on a monthly or more frequent basis.
For additional details or to purchase Javelin’s report, click here for The Cost of Regulation: The Necessity of Bank Fees.
Related Javelin Research:
- Evolution in Consumer Payments Behavior: How the Durbin Amendment and the Economy Are Driving Payments Change
- 10 Trends That Will Transform Banking, Payments, Mobility and Security in 2012
- Bank Transfer Day’, What Really Just Happened?
- What’s the profile of people who left large banks for Bank Transfer Day?
About Javelin Strategy & Research: Javelin Strategy & Research provides strategic insights into customer transactions, increasing sustainable profits for financial institutions, government, payments companies, merchants and other technology providers. Javelin’s independent insights result from a uniquely rigorous three-dimensional research process that assesses customers, providers, and the transactions ecosystem.