This list of the top banking and fintech trends for 2022 isn’t going to tell anyone anything they haven’t heard of. It’s supposed to help banks and fintechs to plan for 2022 – ie which trends should be on your strategic priority list for the coming year.

Trend # 1: The Big Overdraft

In June 2021, following Ally Bank’s announcement that it would no longer charge its customers overdraft fees, I published an article titled It’s Time to End Overdraft Fees (and Chase Bank is just the bank for that), I speculated that:

“Banks and credit unions will wait and see who else will abolish overdraft fees. If no one blinks, the problem is gone. But if only a few make the move, things will be in a hurry because no one will want to be the last financial institution with overdraft fees. “

The big ones blinked:

  • PNC added a feature called Low Cash Mode, which allows account holders to see what charges are on their account and – if a shortfall is expected – to rearrange the order of transactions to avoid overdrafts.
  • Bank of America launched Balance Connect, a service that enables customers to avoid overdraft fees by automatically transferring money from another account owned by the user at the bank for a fee of $ 12 per transaction.
  • Capital one said it will eliminate overdraft and insufficient funds (NSF) fees for all bank customers, saving $ 150 million in annual sales.
  • JPMorgan Chase announced plans to give customers more flexibility to deal with overdrafts before fees are charged by allowing customers to recover overdrafts and access funds from direct paycheck deposits two days earlier.

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In 2022, community banks and credit unions will need to rethink and revise their overdraft policies and strategies.

However, you don’t necessarily have to eliminate the fee entirely. According to Terence Roche, a partner at Cornerstone Advisors, community-based financial institutions could:

“Lower your NSF fee to the $ 5 to $ 7 range and market it as a convenience fee. Let the customer choose whether they want to pay the check for a fee or return it free of charge, and you have the same choice for the direct debit – pay with a fee or reject it without. “