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In the last decade, the popularity of the “free” checking account has had a significant impact on the financial industry. Consumers today hold an average of 3 checking accounts per household, yet the bulk of their daily transactions come through one “primary account.”

Because of this, the industry has created a new segment of consumers – labeled “non-users” – to describe the accounts that have little or no transaction activity. And, the distinction of a consumer’s primary financial institution has shifted from “where I have my checking account” to “where I do the bulk of my transactions”.

The fact is: Transacting Checking Accounts are the only profitable checking accounts.

Our Account Revenue Solution™ is a turnkey solution that utilizes powerful analytics and segmentation to generate more checking account activity from your existing accountholders by simply converting unprofitable accounts into revenue producing accounts.

Most financial institutions do not realize that more than 75% of their non-interest income is generated by less than 20% of their checking accounts. This small set of accounts represents the true revenue-producing group. Our proprietary strategies double, and in some cases, triple the size of this group by converting your existing non-users and light users into heavy account users.

At Velocity Solutions, our Account Revenue Solution, or ARS, differentiates itself with our unique segmentation approach. We utilize a database application to help identify patterns and characteristics of your retail checking accounts based on transaction activity. With debit card usage becoming the indicator as to whether a retail account is fully active and on-boarded, this information enables us to tailor specific offers to specific customer segments.

According to a June 2009 US Banker article entitled “Taking a New Swipe at Debit Incentives,” analyzing transactional data to create targeted rewards often generates more debit card usage and results in additional financial institution revenue.

Another fact: Having more active accounts equals more profit.

Non-interest income has emerged as the financial industry’s “lifeboat”, yet two-thirds of all point of sale activity is generated by only 20% of checking accounts. The most profitable financial institutions today focus on turning their existing accounts into high revenue accounts, in addition to acquiring new accounts.

And that’s not all – research proves that heavy account users stay with their primary financial institution nearly twice as long as non-users. Non-users stay an average of 3.9 years with an attrition rate of 26%, where heavy users stay 7.2 years and attrition rates fall to less than 13%.

And, the higher-revenue accounts have 2 to 5 additional relationships at their primary financial institution compared to account holders who are not engaged and are not using their checking account.

Consider the benefits that financial institutions utilizing our Account Revenue Solution are experiencing – a 133% increase in the number of heavy user accounts; a 79% increase in debit interchange income; a 25% increase in additional products and services per account; and a 34% increase in account lifespan. ARS generates these kinds of profits because it focuses on increasing the activity of dormant checking accounts – that is, those accounts that are costing you money to maintain yet the account holder is using another institution as his or her primary transaction account.

This strategy is rapidly being adopted by financial institutions across the country as the fundamental building block for a successful and profitable retail account strategy. With 5 million accounts under management and more than 100 financial institutions utilizing one or more of our profit solutions, members of your peer group are already seeing the results Velocity Solutions can generate.

To experience an increase in your revenue and relationships, contact Velocity Solutions today and ask about our Account Revenue Solution.

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