Want a new bank? Deluxe eases the pain

Deluxe Corp. has launched a new product that is squarely aimed at a potentially lucrative market -- the growing number of consumers so unhappy with their banks that they want to take their business elsewhere.

Called SwitchAgent, the new product takes care of transferring customers' pre-authorized payments and deposits -- like mortgage and utility bills -- from their old to new accounts. Shoreview-based Deluxe says it's the first automated system to remove a hassle so big that it has kept people from leaving their banks even if they're dissatisfied.

The product will not be sold directly to consumers, but will be marketed to financial institutions that can then offer it to their new customers. Those who decide to use it will be assigned to a Deluxe agent who contacts the customer's pre-authorized vendors and takes care of transferring those recurring withdrawals and deposits to the new account.

No institutions in Minnesota are marketing the product yet.

Deluxe spent 18 months developing SwitchAgent, but the timing of its launch now appears to be spot-on. This fall's Occupy Wall Street protests are dramatic evidence of the public's frustration with financial institutions, with the reasons ranging from the foreclosure crisis to boosting customers' fees.

That anger bubbled over last month when Bank of America announced a new $5 monthly debit card fee, and other institutions said they would test similar monthly charges. "The Bank of America announcement was really the straw that broke the camel's back. It has caused a tremendous backlash," said Norma Garcia, manager of financial services at Consumers Union.

Susan Eick, vice president for program innovation at Deluxe, said its research showed that financial institutions were looking for ways to make it easier for people to transfer their accounts.

As of last week, 13 banks and credit unions had signed up for the new product with Deluxe. St. Paul-based Bremer Bank, which took part in some of Deluxe's focus group research on the new product, may consider offering it in the future, said Bremer spokeswoman Susan Beatty. Bremer currently uses a manual system to transfer new account holders' recurring payment and deposit information.

Garcia hadn't heard of Deluxe's new product but said consumers could benefit from any changes that would making switching accounts easier.

"Think about what happened when cellphone users could take their numbers with them when they switched companies," Garcia said. "Consumers win when they have more options."

Like Bremer, some financial institutions have had manual switch programs, but dropped them because they were too expensive to operate, Eick said.

"We knew if we could come up with something that was automated we could offer to banks and credit unions, it would be the Holy Grail," she said.

Eick said the largest task in developing SwitchAgent was building its proprietary database of vendors, including mortgage companies, Internet providers, health clubs and government assistance programs. The program has patent-pending technology that handles the timing of the switchovers. The Deluxe agent who works with bank customers notifies them when changes are made and provides them with a switch calendar so they know their account status.

TIC Federal Credit Union in Columbus, Ga., a longtime Deluxe client, was one of eight financial institutions that tested the new product this summer and is still using it.

TIC Vice President Mark Littleton said it's too soon to measure how much business TIC has gained, but that feedback from new account holders has been positive. Deluxe charges financial institutions $60 per switch and is encouraging them to not pass the charge on to customers. TIC is absorbing the cost because it believes it opens the way to more of a new account holder's business like consumer loans and mortgages, "the bread and butter of every financial institution," he said.