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News Now

CU System
Banks use switch kits to lure new depositors
NORTH PALM BEACH, Fla. (8/4/08)--Banks are making it easier for depositors to ”jump ship” by using switch kits, which allow a near-seamless transition for depositors to move from one financial institution to another. Switch kits collect data from depositors’ services--such as automatic payments and savings plans--to help the new financial institution continue the transactions (Bankrate.com July 29). Some kits send letters to appropriate parties to redirect payments and switch direct deposits. The kits also help when a financial institution merges with another, or when a financial institution seeks to retain a depositor that moves to a city that has the institution’s branches, the news outlet said. Switch kits appear to target younger depositors who move around a lot, but they actually are geared toward older depositors who have a lot of assets. These depositors often have multiple accounts and may view switching institutions as cumbersome, Bankrate said. Digital Dialogue offers switch kit capabilities that help new members move existing accounts to credit unions (News Now May 24).


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