Kroger vs. Visa: Who will win the interchange war?
Recently, Kroger made big news by refusing to accept Visa credit cards at some of their stores in western states. “Visa has been misusing its position and charging retailers excessive fees for a long time,” said Mike Schlotman, Kroger’s executive vice president and CFO. “Visa’s credit card fees are higher than any other credit card brand that we accept. Visa’s excessive fees and unfairness cannot continue to go unchecked.”
Every year, Raddon conducts nationwide research of consumers and small businesses to understand their motivations, preferences and behaviors in banking. We include our discoveries in four comprehensive reports: Deposit Insights, Lending Insights, Payments and Channels Insights and Small Business Insights. Subscribers to the Raddon Research Insights program receive these four studies as well as an invitation to a webinar giving highlights and strategic recommendations.
Many banks and credit unions rely on indirect vehicle lending as a sizeable component of their earning asset mix. However, pressure from a variety of sources should make institutions reconsider its role in that mix.
Another Raddon conference is in the books, and what an event it was! So many factors came together to make it exceptional – insightful keynote speakers, engaging breakout sessions, Raddon Rocket cocktails, reasonably good Chicago weather – that everyone involved had a blast.
If you didn’t make it this year, be sure to plan for next year’s event. In the meantime, here are seven key takeaways from the 2018 conference about the industry and the economy.
Millennials should be the best borrowers for banks and credit unions, yet student loans are crippling their ability to borrow. Andrew Vahrenkamp from Raddon walks through what financial institutions can do to help boost this crucial borrowing segment.
November 24 is Small Business Saturday, so now is a good time to recognize the vital force of small businesses for our nation’s economy. Defined by the Small Business Administration (SBA) as having fewer than 500 paid employees, U.S. small businesses employ almost half (48 percent) of the civilian population. These 5.9 million non-sole-proprietorships also are responsible for 41 cents of every dollar earned by American workers. In essence, 40 percent of consumer spending power is a function of small business employment.
From 2009 through 2015, anticipated loan demand was on the decline, bottoming out at 19 percent. Since then, the demand has increased sharply. In 2017, 28 percent of consumers reported they anticipated opening a new loan in the next 12 months. Although demand for loans was down slightly in 2018 to 24 percent, it will remain high in the next 12 months. Financial institutions just need to know where to look for it.
In June, Raddon hosted its quarterly workshops for participants in the Performance Analytics program. These workshops provide a forum for financial services executives, senior leadership, managers and department personnel to discuss the latest industry issues and assess their organization’s performance through the program’s peer benchmarks, trend analysis and customer segmentation schemes.
Free checking is dying. Banks are reducing their branch networks, with 93% of the closures occurring in zip codes with below-average incomes. Transitioning to digital channels is leaving those Americans without access to technology behind. As we noted last year,
I once heard someone say, big goals get big results, no goals get no results. I’m paraphrasing, but the essence of the statement has always stuck with me, especially when researching Raddon’s recent publication, Effectively Serving the Hispanic Market.
Raddon recently wrapped up another round of workshops for participants in our Performance Analytics program. More than 1500 financial services executives attend these sessions each year to collaborate with peers and discuss strategies to improve performance.
The financial press has been fairly outspoken about rising rates. Given the Fed’s persistence in raising the Fed Funds rate, we should expect this level of reporting, but has that concept filtered down to the American public?
Early in 2017 we compiled our predictions for the upcoming year. These were a mix of economic and industry predictions. How accurate were these predictions? As it turns out, we were mostly on the mark in our predictions, at least in terms of direction if not always in magnitude. Here is a review of our 2017 predictions and an assessment of the accuracy of each.
Declining overdraft income makes lower income households challenging to serve profitably. Andrew Vahrenkamp, Senior Research Analyst at Raddon, gives some ideas on how to serve these consumers effectively and efficiently.
Recent changes to the US tax code will affect homeowners with mortgage and home equity products in a number of ways. In this Raddon Report, we look at what has changed, who will be affected, the impact of the change on homeowners, and what institutions can do to market their mortgage and equity products in this new environment.
2017 proved to be a good year for the U.S. from an economic perspective and for the financial industry as well, with new record highs achieved in the stock market, much stronger GDP growth - especially in the second and third quarters, and continued improvement in real estate sales and values. The industry showed continued improvement in earnings and also continued strong loan growth.
Anticipated loan demand is finally increasing after steadily falling since the financial crisis of 2007/2008. Raddon’s 2017 national research indicates 28% of consumers anticipate opening a loan in the next 12 months. This demand for loans has increased significantly from a low of 19% in 2015 and just 21% last year. Home equities are among the products showing increasing demand. The increase in demand is being fueled by rising home prices (up by one-third since 2009) and lower inventories of houses on the market.
On a regular basis, experts of all sorts take to the media to chastise “the kids” for being immature and frivolous. To hear them tell it, Millennials are destroying the very fabric of civilization. When not mocking them for participation ribbons (of which, as a Gen X kid, I have a vast collection), the experts are blaming Millennials for not saving enough, for spending uncontrollably, and for not adequately considering their future.
After years of sales and lending growth, the auto party looks to be winding down; and the auto arena as a whole appears rife for disruption, with potentially profound implications for financial institutions over the near, mid and long term.