Improving Customer Value Through an Enterprise-Wide Payments Evaluation
Nature of engagement: Payments Evaluation
Assets: $293,000,000
Customers: 19,528
Headquarters: Florida
Branches: 6
The financial institution increased their net interchange income by over ten times.
Background
As credit card programs become more robust, financial institutions are continually seeking innovative ways to improve their current card offerings and expand their reach.
Beginning in 2021, a financial institution in Florida examined its existing debit and credit card program and found the results to be less than satisfactory. This kicked off a multi-year payments evaluation which concluded in fall 2023.
During their initial examination, they found card growth fell below intended targets and the program itself was not delivering the anticipated customer value. Built on the philosophy that customer satisfaction should come before profit, executives deemed it necessary to upend its current offerings and look at alternative measures to achieve alignment with its base.
“When a financial institution is evaluating card programs,
selecting partners that align with their strategic objectives and deliver exceptional customer value becomes table stakes for driving bottom line revenue.”
Solution
The financial institution recognized the need for external expertise. The leadership team sought a partner who would educate them along the way and demonstrate the essential skills and industry insights required to navigate the complexities of the dynamic payment landscape.
Given its emphasis on education to client partners, Engage fi stood out as the ideal choice. And having previously experienced exceptional service from the consulting firm, the financial institution was confident they could rely on Engage fi’s expert team, proven processes, and personalized approach to guide their efforts on a project of this magnitude.
Engage fi initiated the project with an examination of the current debit network, debit and credit processors, and card brand, conducting a comprehensive assessment. The approach entailed a methodical, step-by-step process to ensure the financial institution gained the knowledge it needed to make informed decisions throughout the life of the project and beyond. The consulting firm played a pivotal role in helping them understand the inner workings of the processors and debit networks, including key features and functionality of the products themselves, vendor benefits, and institutional goal alignment to elicit a higher degree of confidence in future vendor interactions.
Following a thorough Request for Proposal (RFP) process, Engage fi reviewed several processors to help narrow down their choices. They provided the financial institution with options to enhance, replace, or augment their current card program. The consulting firm also guided the financial institution through its contract negotiations and review stage, ensuring the new vendor was meeting their deliverables and goals.
Results
Under the guidance of Engage fi, the financial institution underwent a debit network optimization, which aligned with their stakeholder requirements and provided significant reductions in network expenses. Additionally, the revamped debit and credit processing program introduced new features and incorporated contactless functionality, catering to modern user needs.
Through Engage fi's negotiations, the financial institution’s net interchange income was increased by over ten times. They also received more than twice the card brand incentives compared to their previous agreement while reducing overall credit and debit processing expenses by a third. Moreover, the card brand partner is committed to bolstering support and incentives for future initiatives.
Post-implementation, Engage fi provided ongoing support, aiding the financial institution in reviewing initial invoices and proper alignment with the agreed-upon terms.
Through this process, the financial institution received guidance on identifying key elements for future reference, distinguishing profitable components from the standard business operations.
Two of the biggest takeaways for the financial institution was the invaluable education they received and the contract negotiation conducted on their behalf. Engage fi offered a deeper understanding of their current card network and beneficial guidance backed by their industry knowledge and expertise that will only empower the financial institution to move forward.
With high card activation rates post-implementation, the financial institution looks ahead to setting ambitious growth targets, crafting comprehensive strategies, and educating customers on the enhanced card benefits. The financial institution believes in being a true financial partner to their customers and providing the best products and services on the market. Their enhanced credit card program is just another way they are putting their customers first.
10x Increase in Net Interchange Income
Maximize the Profitability of your Institution's Payments Portfolio
At Engage fi, we identify the strategies banks and credit unions require to positively impact their payments business.
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