What is the Real FACT Act Opportunity?
Well – here we are – now one month after the FACT Act compliance deadline. For those of you that expected fireworks and smoking computers – I am sorry to disappoint. While we definitely saw many banks scrambling at the last minute to get their plans in place – November 1st was, in many ways, a non-event. I guess in hindsight, this should not be overly surprising. We saw similar activity back when the USA Patriot Act went live. It was months and years before many banks got fully into compliance.
However – we have learned a few things since November 1st that are coming to fruition that I thought I would share.
First of all, most banking institutions took the easy route and deployed existing solutions in the new account environment to screen address discrepancies.
In doing so – these banking insitutions are now seeing their fraud queues nearly quadrupling. This is already ending up in double digits reductions in account approval rates. While many banks are now seeing this, most are looking at it as the cost of compliance and doing business.
On the address change front, most banks opted for sending letters to the old and new address to become compliant. These institutions are now realizing the overall cost and impact – and are now expressing a desire to tighten up these processes in early 2009.
We have been sharing this reality for the past 12 months about this impending ‘pain’ and that pain is now being realized. In a time when banks are closing the doors, cutting expensese at every turn and looking for ways to increase revenues – you sure would think they would be interested in ways to minimize the pain and grow the top line.
It will be interesting to see what happens when the first few banks go through their first post FACTA audit in the coming weeks and months.
More to come,