The Bankwatch

Tracking the consumer evolution of financial services

The power of social networks and banking is only now becoming clear

 Wesabe continue to drive the new directions in social banking, with this kind of insight, on overdraft charges.

When we first launched Wesabe last November, we were not surprised to see that our #1 top merchant at that point was Amazon, and #2 was Netflix. That matched well with the stereotype of “early adopters.”

What was surprising, though, was the merchant #20 was Overdraft Fee. If you think overdraft fees just hit people who are “bad with money,” they don’t — they hit a huge percentage of the population, and as Wesabe has grown, we’ve seen that more and more.

Currently, our users have been charged roughly $200,000.00 in overdraft charges in just the past few months

Source: Wheaties for Your Wallet » Blog Archive » More on how banks maximize your overdraft charges

No-one sees this stuff other than a Wesabe.  This is brilliant insight that will lead to new pressures on Banking product development which would not have happened otherwise.

 

Written by Colin Henderson

May 1, 2007 at 00:21

Posted in Uncategorized

2 Responses

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  1. This is huge, Colin — huge.

    Graeber at Forrester wrote a report a while back showing that satisfaction among consumers who are hit with overdraft fees is much lower than consumers w/o those charges. Yet, when contrasting the satisfaction of customers w/ ATM fees vs. those without ATM fees, there was little difference in their satisfaction.

    And on top of that — many consumers who were hit w/ ATM fees didn’t even remember those charges — yet nearly everyone who had an overdraft charge remembered it.

    What Wesabe is doing is amplifying this effect. Putting a particularly painful part of a customer’s relationship with his or her bank under even a brighter spotlight.

    There’s [at least] one bank running ads around here claiming that it’s “committed to the satisfaction of its customers”. Well, not as long as it charges huge overdraft fees it isn’t.

    rshevlin

    May 1, 2007 at 07:52

  2. Thanks Ron .. Thats interesting re OD fees vs ATM fees and loyalty. The former can be quite usurious, as large fixed fees relative to often small amounts of overdraft.

    Colin

    May 1, 2007 at 16:15


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