Strunk at the ABA’s Conference for Community Bankers 2022

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For the first time in two years, the American Bankers Association hosted the Conference for Community Bankers in person February 20-22. Strunk’s associates were pleased to see old faces and new and to gather in the beautiful location of Palm Desert, California.

There were many engaging sessions offered, with a focus on community banks establishing use of Fintech solutions to remain competitive. In addition to highlighting their overdraft service and best-in-class governance, risk and compliance solution, Strunk introduced Quilo to this audience for the first time. Quilo is an all-digital loan and payment platform for community banks to offer POS financing direct to their account holders.

Quilos can be used for new purchases online or in store, to pay down credit card balances, or to replenish a checking account for debit card purchases. Banks can also set up alternative payment technology among their merchant clients as an additional revenue stream.

Customers will experience stress-free, instant access to funds via the digital experience online and on mobile devices, while banks will achieve an ROA up to 5%. ABA member banks were excited to learn about this new program that is truly a win-win for account holders and bankers alike.

For more information on Quilo, visit https://strunkaccess.com/landing-pages/quilo/.

Tracking Charge-Off Items and Recoveries

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ODP Manager is updated daily, through the extract file import process, with the current information from the core processor; however, your users may benefit from some of the hosted software’s manual tracking features to monitor other data as well.

If your users need a better tool to manage the charge-off and recovery process after the deposit account has been closed, the Charge-Off Items and Recoveries feature included in ODP Manager may be helpful.

Once an account has charged off, you can create a charge-off item to track the charged off principal and fees. Notes can be added when the item is created or throughout the recovery process. Updates and changes are also logged. When recoveries are made, they should be entered in ODP Manager, reducing the overall balance tracked.

To monitor the overall status of charge-offs and recoveries, a summary screen displays basic charge-off information and status. By default, ODP Manager displays the Charge Off Items for the last year, but a different timeframe can be selected by specifying a start date and an end date. For reporting purposes, the charge-off item summary can be exported as a PDF.

Please contact Strunk Support at support@strunkaccess.com with any questions or to find out more about using this feature.

Bankers: The Race is on to Attract Younger Customers

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Nearly 70% of consumers currently use Buy Now, Pay Later (BNPL) services and the number is even higher for millennials and Gen Z’s. Community banks have battled for years to try to provide online banking, mobile banking and other services to keep and attract young customers when they leave for college and don’t come back home.

Now Fintech companies are providing services that your customers are using and they are literally taking consumers away from community banks right before banker’s eyes. When was the last time you checked on debits to your customer’s accounts going to Affirm, Klarna, Open Pay, Pay Pal and other digital lending solutions? When will these customers leave your bank for the high yield checking accounts these companies offer?

So far banks have been left of the sidelines and if you don’t act quickly there won’t be anything left to keep young customers from fleeing your bank. Consumers between the age of 22 and 40 are five times more likely to use buy now and pay for it over time than seniors and baby boomers.

Younger consumers are looking to spread out payments over time for larger purchases rather than pay for them with an evergreen credit card. They trust the bank and would rather do this business with you than a Fintech. The service has to be easy to use and convenient.

Quilo is the answer. Now is the time to disrupt the Fintech market and get in the game.

Contact Strunk at info@strunkaccess.com or 800.728.3116 for a 45 minute web demo to see if Quilo is a fit for your bank.

https://strunkaccess.com/landing-pages/quilo/

Quilo selected by the ICBA’s ThinkTECH Accelerator Program

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Strunk is thrilled to announce that Quilo has been selected by the ICBA’s ThinkTECH Accelerator program as one of only 11 fintech companies to be part of the 2022 ThinkTECH cohort.  Additionally, ICBA has made an investment in Quilo.

ThinkTECH is a community bank-focused fintech accelerator run in partnership with The Venture Center, and was designed to identify and foster community bank-enabled fintech partnerships. Through an intensive 12-week program, these promising fintechs will meet with community bank leaders, policymakers, and subject-matter experts to collaborate on fintech solutions tailored to the unique needs of community bankers.

Starting in 2019, ICBA ThinkTECH Accelerator was launched to connect community bankers and fintech visionaries to develop solutions specifically for the industry.

Quilo is an all-digital, unsecured personal installment loan solution that can be used three ways:

  1. Replenish checking account for debit card purchases
  2. Pay down credit card balances
  3. Make new purchases online or in store

The platform requires no integration with a banking core and because it’s all digital allows your staff to stay in control of the loan portfolio with minimal effort.  Additionally, it comes with a turn-key fully managed digital marketing campaign that is designed to attract your existing customers and promotes your brand to new customers locally.

To learn more about Quilo, contact Strunk at info@strunkaccess.com or 800.728.3116.

Overdraft Protection In a New Light

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Over the past year, there has been a great deal of scrutiny surrounding overdraft privilege programs. Many news articles focus on the potential negative aspects of overdraft privilege programs. They make the generalization that users of these programs are not sufficiently educated on what usage truly means and that users are typically lower-income.

A 2019 survey from Fiserv shows that 91% of consumers report that they are familiar with their financial institution’s overdraft policy. Strunk has historically stated that clear communication with consumers regarding key elements of the financial institution’s overdraft privilege program is not only important from a compliance perspective, it will also improve program performance. This allows consumers to be more familiar with the program features and limits.

A research paper published by The American Bankers Association provides statistics that show the inconsistencies in data that most articles use characterizing heavy overdraft users as lower-income consumers. The paper states that lower-income households (<$24,000 annual deposits) averaged 10 items paid into overdraft annually vs 18 items for consumers in the highest income level (>$60,000 annual deposits). Lower-income account holders receive more fee waivers and refunds than higher-income consumers and paid lower effective average overdraft charges. Either way, this study shows that consumers of all income categories utilize overdraft programs.

Another argument commonly made in regards to overdraft programs is that consumers find the fees unfair. A common example given that usually describes an overdraft activity is a consumer might buy a $2 cup of coffee and get hit with a $35 fee. In reality, the average size of a purchase that triggers an overdraft fee has nearly quadrupled from $50 to almost $200 in recent years. It is simply not accurate that consumers are getting charged for small purchases. Additionally, a Morning Consult study found that about half of Americans think overdraft fees are fair.

A study by Curinos research found that more than 60% of overdrafts come from consumers who intend to use the service. Likewise, more than 80% of overdraft transactions come from consumers who opted-in to debit card overdraft transactions (Regulation E) with the clear intention of using it to cover their payments. Furthermore, two-thirds of consumers indicate that, while overdraft can be expensive, they don’t want to see reductions in their access to the service or limits. This indicates that consumers understand that if they overdraw their account, having the financial institution pay the overdraft item for them and charge them a fee is a greater benefit to them than returning that item and still charging the consumer a fee. This prevents the consumer from having to pay additional fees to the retailer and potential re-presentment fees.

Less than .15% of complaints to the CFPB were related to overdraft privilege in 2020. Overdraft privilege programs give consumers services that they need and want while also giving them options, which is best for all consumers.

Inform Your Customers About Their Regulation E Opt-In Options

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The Consent Form for Overdraft Services (A-9 form) provides your customer with the information they need to know about overdrafts and overdraft fees. In addition to serving as a disclosure of the appropriate information, it also facilitates a customer’s opt-in election by mail. Customers are also able to opt in over the phone, in person, or electronically.

When you include an account’s Reg E Opt-in election in the extract file imported into ODP Manager, ODP Manager can determine whether an account has already opted in or has not yet responded with a Reg E election. This means that your customers will receive the appropriate letter content based on their Regulation E Opt-in choice.

Strunk’s Welcome letter, Reinstatement letter, and Reg E Opt-In Followup letter templates make sure that your customers are aware of their options to opt in and that they know whether they already have the ATM and Everyday Debit Card transactions covered by their Overdraft Privilege limit.

The Welcome and Reinstatement letters sent when a limit is assigned or reinstated can include the Consent Form for Overdraft Services and can inform the customer of other options to opt in: by mail, online, in person, or by phone.

The ODP Manager software can identify which customers have not opted in and have an OD limit, in addition to other criteria. This allows you to communicate with these customers on an ongoing basis to send letters that explain the Reg E opt-in benefits and opt-in methods and that provide a consent form.

Strunk can also facilitate your customer’s online opt-in by creating a Reg E opt-in form and Reg E opt-out form that mirrors the content in your ODP Manager letters. You would then add links to these forms to your website.

Let ODP Manager expand your options to allow your customers to choose Overdraft Privilege coverage for ATM and everyday debit card transactions. Please contact Strunk Support at support@strunkaccess.com with any questions or for more details.

Digital Lending to Attract Millennials and Gen Z’s

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For years community banks have tried to attract younger consumers to replace older customers whose deposits generally leave the bank when they pass away. Also, baby boomers and the silent generation born before 1959 tend to be deposit gatherers rather than borrowers.

During the pandemic in 2020 that continues on in 2022, consumer buying habits have changed as well. More purchases are being made online and companies like Amazon and Walmart have flourished. Paying for purchases when baby boomer bankers grew up were either on a lay-a-way plan at JC Penney or credit cards were used. Some merchants financed the sale so consumers in the 1970’s and 80’s could pay over time for their purchase.

As with many banking products providing a service that your customers want and need is imperative to survive. Evergreen credit cards that never seem to get paid off are somewhat out of favor with the younger generation. The Buy Now Pay Later business is expanding at warp speed and your customers love the simplicity of this relatively new service…unfortunately, banks are missing out on a big opportunity.

Bring in Digital Lending in 2022. Quilo has developed an easy to use yet sophisticated smartphone lending solution that enables your bank to participate in this prime lending business. Digital banking has been around for quite some time on the deposit side of the house but not lending…until now.

Take 45 minutes to see the demo of Quilo. You will be amazed what technology can do to attract younger consumers that are currently using Fintech companies for this service.

Simple and Efficient Management of the Fresh Start Loan Process using ODP Manager

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Fresh Start Loans can help customers resolve their overdrawn account status with up to four payments and can allow them to keep their checking account open. Fresh Start Loans are also a collection tool that can help financial institutions recover and collect on overdrawn accounts that might have otherwise charged off and been closed. Leveraging the tools included in ODP Manager can make managing the Fresh Start Loan process easier and more efficient.

A repayment schedule can be entered for each account with an approved Fresh Start Loan. It will include payment reminders that display when the FSL payment is due to remind your users to check if the payment has been made as agreed. Once verified, FSL payments can also be tracked in ODP Manager.

Instead of needing to create agreements outside of Strunk’s ODP Manager, the Fresh Start Loan Agreement document can be generated directly from the repayment schedule. In addition to generating the agreement from the repayment schedule, users also have an option to generate the agreement as an Ad Hoc letter.

If customers under a repayment schedule do not pay their Fresh Start Loan payments as agreed, the default close letter can be generated and tracked in ODP Manager as well. If any other Fresh Start Loan letters are needed for accounts in a repayment status, an Ad Hoc letter template can be created. By entering the deposit account number, ODP Manager will pre-fill the account information. After the letter is generated, it will be tracked and retained in ODP Manager just like the other Collection and Custom letters.

ODP Manager includes a report that lists all accounts currently under a Fresh Start Loan status. If details are needed about current repayment schedules, a Repayment Schedule summary report can also be exported to PDF or Excel.

Please contact Strunk Support at support@strunkaccess.com with any questions or for more details.

Consumer Lending Opportunity for Banks

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Consumer lending has been a thing of the past for most community banks since credit cards took over unsecured small dollar lending in the 1980’s. Some banks try to compete with credit unions and auto companies for indirect car paper but that has diminished as well due to unprofitable low rates the competition is providing. Core processors have been slow to react to financial technology firms who are providing young consumers with products and services they want and use…digital lending.

Until now, community banks have been shut out of this market. Quilo is a digital lending tool that allows banks to make and underwrite the loans while allowing the smart phone app to fund, collect, and manage consumer loans profitably. Quilo provides instant access to loans of $250 or more through a virtual card on your customer’s phone. Consumers can also use Quilo to pay down or pay off high interest rate credit cards or replenish their checking account at your bank for recent debit card purchases.

Your bank has complete control over the credit risk. Maintaining minimum and average credit scores of the portfolio ensure that credit quality remains high. The Quilo scoring engine does a soft pull of the consumer’s credit bureau report to determine if a loan should be made and what amount. If the consumer qualifies and takes a “Quilo” the interest rate is calculated based on risk of loss, bank’s cost of funds and desired return, and processing costs. Typically the interest rate to the consumer will be between 8% and 12%. The term of each loan is determined by the consumer. The return to the bank is 5%-6%. A pretty good yield given today’s interest rate environment.

To set up a 45 minute demo of Quilo demo contact Strunk at info@strunkaccess.com or 800.728.3116.

Strunk at the WBA Lenders & Chief Credit Officers Conference

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Last week the Western Bankers Association hosted its Lenders & Chief Credit Officers Conference, their first in-person event since early 2020. Strunk was excited to attend and to introduce Quilo, an instant installment loan solution directed at consumers.

The four day event was hosted at The Ritz-Carlton, Laguna Niguel and was packed full of content for bankers. The agenda included sessions on “Making and Sustaining an ‘All-Weather’ Credit Culture”, “Issues in Commercial Lending”, “Grow Loans and Protect Income Through Hedging” and a Legislative Update from Keven Gould, SVP – Director of Government Relations for the California Bankers Association.

Strunk’s CEO Dan Roderick was pleased to demo Quilo prior to the Interactive Discussion with Bank Chief Appraisers. Quilo is a fully turn-key FinTech consumer installment loan program that will allow you to tap into the EXPLOSIVE ‘buy-now-pay-later’ instant installment loan market to increase loan volume and margin.

Technology has changed the market for installment loans and Quilo can put community banks on the path to high loan growth and increased profitability. Quilo is a game changer. Utilizing the latest in technology, Quilo creates the opportunity to give consumers what they prefer.

Bankers were enthusiastic about the solution and we look forward to continued conversations with many of the conference attendees. If your bank is interested in growing your loan portfolio and improving your margin, let us show you how Quilo can make that happen.

An independent certified public accountant has examined Strunk’s operations and found them to be in compliance with the AICPA’s Trust Service Principles. It was determined that Strunk meets the Security, Availability, Processing Integrity, Confidentiality, and Privacy criteria for SOC 2 established by the AICPA.