When Bank Tech Vendors Cater to the Underserved, That Gives "Value-Add" A Whole New Meaning
I call FIS's Electronic Financial Account (EFA) a piece of tech sensitivity that goes far beyond the rigors of transaction processing. And banks need tons of sensitivity these days! There I was minding my own business and waiting for the next item of bad news to hit the banking industry when up popped a press release about an Electronic Financial Account. I was about to press delete, thinking same ol', same ol', but I knew better than to ignore an FIS news alert.
The EFA really hit home with me because it reminded me of my first fiduciary role in 1945 as bill payer for the Gillis Household. One day, I recommended that my mother get a checking account to pay the bills so I wouldn't have to walk five miles to Union Square every ten weeks to pay the John Hancock Life Insurance premiums. Her answer was, "Your father's name was Arthur D. Gillis, not Arthur D. Little, so I don't know where you got your radical ideas about paying bills. When I count out the cash and hand it to you, I'm certain that the payment will be credited and you'll come home safe and sound. Be a good boy and do as I say." OK, Ma, just trying to make it easier.
I wanted to compare just what EFA and DDA offer to see for myself the best fit for the unbanked and underbanked. As always, I caution readers that my views are not always representative of the masses. For example, when the debit card (for purchases) appeared fifteen years ago, I opted out -- redundant. I still don't use one, preferring a thinner wallet of two credit cards, business and personal. Here's what I came up with for the EFA, but I am neither "un" or "under" when it comes to banking, so I don't need one:
| User | EFA | DDA |
|---|---|---|
| A business | special needs, petty cash | ideal, a must |
| A focused consumer | preferablecomplex | |
| More than 20 trans/month | could handlebetter||
| Line of credit attached | noyes||
| Paper-based | nocommon||
| Routine use | simpleryes||
| Bookkeeping software | noyes||
| ACH | noyes||
| Expensive | nocould be||
| Collected funds | alwaysvariable||
| Pay by check | nomost common||
| Offered by retailers | yesno||
| Self service access | yesyes||
| Accepted by payments networks | yesyes||
| Electronic payments | yesyes||
| Customer services | the usualmore||
| Regulatory influence | nadahassle||
| Holder dignity | highquestionable*||
| Risk of negative balances | no waycould happen||
| Threat of identity theft | namelesspossible||
| Profit potential for bank | littleup or down||
| Independent of core brand | yesno||
| Real-time impact on balance | yesday-delay||
| For first-time bank users | compellingwhatever||
| For the sweet and friendly | you betchanot now||
| For establishing credit value | strongquestionable||
| What banks think of it | low costhigh cost||
| Where to get it | criticalcommodity||
| For Art Gillis | noneed it
I don't believe any bank would use the content of this blog as their ad copy to sell EFAs, but my job is NOT to sell but instead to make a comparison of a very old and widespread customer account and a brand new one. In my opinion, the new one demonstrates an ability for banks to welcome millions of new prospects to the benefits of becoming bank customers with an instrument that they can use comfortably.
*One cannot open a new DDA account without a check to a credit reporting agency to see if there are any questionable histories. My dignity was challenged when it happened to me. The lady who was doing the checking knew me and told me why they check but the bank doesn't tell others. They look for incidents of money laundering. The simple answer is DDA has all kinds of ramifications, but the EFA is like a gift card. If the money is there, no one questions the holder.
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