Payments and Ecommerce Sample Project
Debit Card Profitability Enhancement
The challenging post-Durbin environment represents a major reduction in an important fee income source for large banks, but at the same time it has opened additional opportunities for community and regional banks to optimize their debit card programs and improve fee income. BSG consultants have assisted management at numerous community banks in developing and implementing programs to enhance their debit card programs.
Credit Card Optimization
Credit cards continue to be an important and highly profitable asset class for many banks. BSG consultants have helped bank executives determine the feasibility of re-entering the credit card issuing business and replacing their agent bank programs. For those banks that have the scale to support the business case for becoming credit card issuers, BSG consultants have provided detailed implementation plans and support through every step, from selecting and negotiating with vendors for processing, fraud management, collections and customer service, to assisting with product design and identification of an appropriate organizational and staffing model. For banks that have agent bank relationships, BSG has assisted in developing and executing plans to maximize account acquisition and customer penetration, and helped with benchmarking and agent bank contract re-negotiation.
Merchant Acquiring Business Growth Plan
BSG consultants have worked with both large and small merchant acquirers on a wide variety of engagements. BSG consultants assisted executive management at a national bank in evaluating the feasibility of spinning off their merchant acquiring business into a joint venture with the eventual goal of maximizing and monetizing the shareholder value created by the JV. On a recent engagement, BSG consultants reviewed a small bank-run merchant acquiring program and developed a growth plan to increase sales and triple the size of the business within five years. BSG M&A specialists have conducted due diligence reviews and fairness opinions of various merchant acquiring businesses for equity investor groups and potential buyers.
Design Integrated Payments Management Organization
A growing trend among financial institutions is to integrate management of debit, credit, prepaid, ATM, POS, acquiring and other payments units into a comprehensive payments line-of-business. Most banks take the initial step of establishing cross-functional “Payments Councils”, which serve as a communications and coordination forum at best, but are for the most part ineffective. Several client banks have asked BSG consultants to assist in defining and implementing a roadmap that will lead to creating an integrated payments line-of-business. BSG’s interactive process on such engagements ensures the participation of key stakeholders to build buy-in and ensure alignment around the recommended direction and approach.
Emerging Payment Products and Technologies Tactical Plan
Given all the attention new payments developments, such as mobile payments, contactless payments and prepaid cards have been getting recently, BSG often finds banks with multiple (and occasionally competing) R&D projects in these areas. In one recent case, bank management asked BSG consultants to review and assess their various payments initiatives. BSG found 13 separate projects, some from the product area, some from channel management, and others from IT areas that were competing for resources and priority, with four of them overlapping in their focus on mobile payments. The result was ineffective progress, wasted resources and confusing vendor arrangements with multiple internal “owners.” BSG helped implement an enterprise-wide payments initiative prioritization and management approval process with C-suite executive oversight, while ensuring execution was maintained at the appropriate functional level. BSG was also asked to monitor and fine-tune the process until it became institutionalized.