Bank of America announced that it would begin testing new banking offerings in select markets in December as part of its “new consumer bank strategy”. These new offers are so that the bank may figure out new sources of revenue. The New consumer banking strategy will focus on a relationship enhancement strategy which will hopefully have consumers bring more business to the bank as well as make pricing more upfront and transparent.
Previously Bank of America had depended on penalty fees which now this new strategy is trying to make up for. This is an attempt to move Bank of America away from this dependence on penalty fees, and move towards making Bank of America a premier banking experience which will result in additional revenue.
In August Bank of America began offering one of its first consumer solutions, eBanking. This allows for customers that use online banking and ATMs to get better pricing. In December the bank will continue this new idea of providing customers choices on how to pay for banking services and reward them for using certain products. Additional testing will begin next year with new products in the payment area that would meet the evolving needs of specific customers.
Anne Pace, a spokesperson for Bank of America, thinks that consumers “will choose to pay through their behaviors — either banking through self-service channels or by their frequency of payment activity through a debit card or credit card. Some will choose to bring us more of their business through higher balances, their mortgage, etc. Others will simply choose to pay a monthly maintenance fee”. People with a cynical view on this new strategy believe that these rewards will simply be no fees but nothing more than that.
I believe that Bank of America’s strategy will work. Bank of America is enticing people with rewards which will lead to more people bringing their business to Bank of America which will increase their revenue. Bank of America has to make sure that these rewards aren’t as simple as cynical people think they will be or else there will be no incentive for people to bring their business to Bank of America.
http://bucks.blogs.nytimes.com/2010/10/21/what-will-bank-of-america-do-to-its-checking-accounts/?scp=7&sq=consumer%20banking&st=cse
This new program is going to be a very important indicator for Bank of America's future success. The bank has come under a lot of scrutiny lately, so it needs this program to boost revenue.
ReplyDeleteI just hope it works. if bank of america is serious about this new program then people will be sure to bring their business there. but if they are just trying to make a quick buck, i feel people will see through that right away and go elsewhere
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