Finally, a bright spot in the cloudy sky of today’s markets. NACHA recently announced that ACH payments in Q4 were up 4.5% over the same period the previous year. Even better, Internet-initiated payments were up 16.5%, and, best of all, back-office conversion transactions were up 49% between the third and fourth quarters alone.
Fundtech has conducted its own survey of 70 small and mid-sized banks in North America regarding ACH payment processing. Sixty percent of banks confirmed they have seen an increase in revenue over the past year but almost 40% said they were not satisfied with their current ACH processing system – with inadequate reporting capabilities and insufficient automation being the top concerns. The need to meet market, regulatory and economic demands – and therefore the need for more sophisticated reporting and functionality – is clearly putting pressure on banks’ existing ACH systems.
As ACH services continue to grow both in volume and importance, expanding and improving solutions can become a key competitive differentiator for banks. Advanced services – like extensive reporting, continuous processing, automated filtering, checking and error correction – can become a meaningful point-of-difference to a prospective corporate client.
Today’s banking environment is filled with opportunities for healthy small and mid-sized institutions. Never before have so many of their major competitors been so unable to compete. The big banks are too focused on survival to watch their flanks. This poses a unique opportunity for community banks to seize the moment – and use it to grow market share. All those new clients, who came as refugees from big banks, can become tomorrow’s full-service corporate client.
ACH business now offers a unique market opportunity: the time is now for small to mid-size banks. Link to more information on this research.
Shaun, good comment. I would add that outside of the specifics related to ACH, I am growing increasingly concerned that there might be an underestimate of the risks still worming through the US economy. If you look at the Dow and gold, there seems to be a presumption that all is well and good in the US economy, and I just don’t see how that comports with a declining CPi and housing starts falling 10.8% last month to a seasonally adjusted annual rate of 510,000. (That is the second-lowest rate since the 1940s, by the way, bettered only by last January’s 488,000 pace, which remains the post-war low.) Sure, there are opportunities for small- and mid-sized banks — the ones that are still in business in 12 months, that is.