Wow, look what just came in the mail.

Dear Bank Stanky Customer With a Balance Under $10,000,

We appreciate your continued business with Bank Stanky. Like you, we have been impacted by these turbulent times. So that we can maintain our bonuses in the wake of reduced overdraft and debit card fee income and continue to provide you with our signature “Step-Into-Stanky” Service, we have instituted new fees effective November 1, 2011:

Fire Suppression Charge: $1/month. Building codes and fire marhals require our institution to maintain sprinkler systems in our facilities. This intrusive government regulation does not come without cost to the Bank, so we must pass this charge on to the users of our facilities.

Stadium Signage Surcharge: $.50/home game. Bank Stanky is proud to support our local sports teams at Stanky Field. Your local taxes already paid for the construction of the stadium, so we’re sure you won’t mind chipping in for our naming rights. Send us a self-addressed stamped envelope and we’ll send you a coupon for a free small Pepsi next time you’re at the ballpark.

We’ll Keep The Change Program: $.01-$.99/transaction. We know it’s a pain to keep track of spending to the penny. And a bunch of tiny deposits into your savings account are a pain to keep up with. For your convenience, we will be rounding up all of your transactions to the next dollar and keeping it for ourselves. You can thank us next time you’re balancing your checkbook.

Premium Facilities Fee: $1/month. We could have put our branch in next to the Papa John’s in the Shady Acres strip mall but chose instead to establish a more substantial presence in your community. Because we have invested in a regional headquarters complete with private bankers, mahogany, rich corinthian leather, and a marble staircase it’s important we recover these costs from the beneficiaries.

By increasing your checking balance to at least $10,000, you will qualify for Gold status which is exempt from the above fees. Until then, you will remain in Brown status and will incur these new fees beginning next month. We look forward to restoring our prior levels of fee income. If you have any questions, do not hesitate to contact your Stanky Banker.

Sincerely,

Bank Stanky Management

In all seriousness, the recent spate of fee announcements has been pretty ugly but it hasn’t come to this (yet). I asked the question yesterday about whether we as an industry have just given up on the little guy rather than find ways to charge for services customers value or operate more efficiently. I try not to raise a question like that without having some potential answers. Here are a few things I’ve thought of:

There’s something to be said for the freemium model when it comes to web and mobile applications. You can pay up for premium features and avoid advertising, or you can get many of the benefits of the premium version with a free, ad-supported version. Maybe it’s time for sponsored Internet and Mobile banking for customers that might otherwise be subject to fees. If a bank’s determined a customer is unlikely to buy an additional product, why not use the screen real estate to promote a third party product that’s of likely interest to the customer and take in some advertising revenue?

Byproducts of checking accounts such as transaction data can be used by banks to improve service and potentially generate income. Merchant-funded rewards are a recent example of a service banks can provide that gives the customer something of value and doesn’t impact the bank’s bottom line. I haven’t seen all the fee-sharing/pricing models on these programs, but why couldn’t banks make a bit from this?

Consumer insight can be gleaned from the ton of historical data that payments produce, too. With the recent advances in Big Data are banks getting value from analyzing spending behavior. Or, is there a market for aggregated, sanitized transaction data–are there audiences that would pay for access to purchasing trends? Can banks find value in their payment data to cross-sell merchant services more effectively? Seems to me there’s gold in there somewhere–is the value of this transaction information figured in anywhere in profitability models?

Finally, customers will pay for things they value. Maybe it’s a dumb example example, but has anybody piloted or looked at the P&L for some sort of overdraft notification service, where a bank could send a message to subscribers when they will overdraw unless they make a deposit by the close of business? If the fee income from a monthly/annual service fee exceeds the lost overdraft income, the customer gets something they value (the ability to avoid overdrafts by being warned in time) and the bank wins, too. Probably small potatoes on this one, but you get the idea.

Those are just a few examples. As I said yesterday, banks have probably put some thought into these recent fee increases. I’m just not completely confident that we as an industry have looked at other options besides increasing fees on basic checking and payment services that have historically been free. The answer could be premium-priced services, it could be other parties footing part of the bill, or it could be efficiency improvements. There’s more than one way to change the checking profitability equation. This guidance might also serve those institutions that are the beneficiaries of runoff from large banks so that they can take on these new relationships profitability.