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100% Branchless Banking – Myth or Reality?

  Branchless Banking - Is it possible? In a recent logicpath blog post - Top 3 Questions to Ask Before Creating a Branch Transformation Strategy – my colleague, Meghan Quinlin, spoke of smart kiosks, online banking, and phone banking replacing some existing branches at banks and credit unions if the demographics made sense. The keyword in that statement is ‘some’, because surveys continue to show customers – young and old – still want branches as part of their banking channel mix. But, beyond cu...

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How Will the Fed’s Balance Sheet Reduction Affect Banking?

At its September 2017 meeting, the Federal Open Market Committee (FOMC) decided to leave interest rates unchanged, as was widely expected. The bigger news was that the Committee had decided to initiate its balance sheet normalization program in October 2017 so, in this blog piece, we plan to understand the unwinding of the Fed’s balance sheet and how it might impact markets, interest rates and financial institutions such as banks and credit unions.

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Top 3 Questions to Ask Before Creating a Branch Transformation Strategy

New generations are demanding a wide range of mobile and web-enabled products and services in the banking and financial services sector. Self-service and new digital offerings have been well received by millennials and Generation-Xers (who, together, make up America’s largest demographic) and have pushed financial institutions (FIs) of all sizes towards transforming their business models to better compete, and survive the digital age.

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Three Methods to Improve Customer Engagement

 How Customer Engagement Can Help Your Business Thrive in Today’s Disruptive Banking Environment Today’s business environment is very different from what it was twenty years ago. Tremendous technological innovation over the last two decades and the accompanying free flow of capital have led to an unprecedented disruption of existing business models (including financial services) and have re-shaped customer behavior and expectations. To survive and thrive, traditional businesses, such as banks an...

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Top 3 FAQ on Deposit Reclassification

Although it’s an established process, many financial institutions (FIs) have questions about Deposit Reclassification (AKA, retail sweep programs). Even though the program was permitted by the Federal Reserve in 1994; when most hear of Deposit Reclassification or retail sweep programs - it seems too good to be true. Our family of companies has pioneered Deposit Reclassification and forged the way for this process to be a tried and true solution for banks and credit unions. To clear up some commo...

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Working Together - Regulation D and Deposit Reclassification

Deposit Reclassification, also known as a retail sweep program, allows financial institutions to reduce their Federal Reserve Bank reserve requirement. The Federal Reserve’s 12 CFR 204 Regulation D sets out uniform requirements for all depositary institutions’ reserve balances - either as vault cash or as funds held with their local Federal Reserve Bank. Retail sweep programs reduce reserve requirements, which Regulation D sets out for financial institutions to observe. How do these two opposing...

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Recover Your Federal Reserve Balance and Improve Profitability within 60 days... Here's How!

Depository institutions, such as banks and credit unions, can significantly reduce their reserve requirements and eliminate balances held at the Federal Reserve Bank by implementing retail sweep (aka Deposit Reclassification) programs. Freed-up balances can then be used to boost lending and increase profits. It is best for depositary institutions to implement a tried and true retail sweep solution because their sweep percentages optimize non-reservable balances and maximize earnings potential.

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Topics: Sub Accounts, Cash Balance, profitability, Federal Reserve, Deposit Reclassification

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Top Three Challenges & Solutions for Cash Management

With interest rates poised to rise in the coming quarters, financial institutions (FIs) must seriously undertake cash management initiatives that identify and minimize non-earning assets (such as un-needed or excess cash in ATMs, cash dispensing machines, teller drawers and vaults), optimize cash inventory and redeploy excess cash profitably through loans and investments. While most FIs “think” they manage cash efficiently, data shows that cash is often managed up - to limits, not down - to usag...

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Topics: Cash Limits, Cash Management, Cash, Cash Usage

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FOMC Minutes, Market Data Suggest Fed Will Raise Rates in December 2017

After holding the Fed Funds target rate near zero (0.00% – 0.25%) for seven years, the Federal Reserve raised its benchmark interest rate range by 25 basis points in December 2015 (see chart below) on signs of a strengthening U.S. and global economy. Next, the Fed waited until December 2016 to hike rates by another 25 basis points. At the time, the Fed signaled that there could be as many as three rate hikes in 2017 if the economy appeared strong. Then, on solid jobs numbers and falling U.S. une...

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Topics: interest rates, inflation

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The Biggest Pitfall of Cash Management - Managing Up to Limits

  Financial institutions (FIs), such as banks and credit unions, set limits on the maximum amount of cash they can carry in their branches and ATMs. These limits reflect cash needed to maintain insurability, regulatory compliance and risk management, and to meet fluctuating customer cash withdrawals. And that’s all well and good. But most cash is managed up to this maximum cash limit, and this is the biggest pitfall of cash management today.

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Topics: Cash Limits, Cash Management, Cash

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