On the question of how to react to the most recent regulatory changes with regard to the Dodd-Frank Act and the Durbin Amendment, it is interesting that a wait-and-see attitude prevails in the banking industry. Many large banks say that they are doing away with free checking and moving to other deposit options for customers. Others are on the sidelines, torn between their credit union competitors and the big banks. Currently, free checking represents 20% of the deposit base in the United States, and there is some anxiety around both loss of revenue and deposit balances. The changes in fee structure regarding overdraft changes and the order of clearing takes away the revenue stream that will have to be addressed through alternative pricing. Other banks are taking an opposing view—that the rush to fee-based checking leaves an opportunity to those who can find a way to capture customer growth and cross-sell products that will make them profitable.

Let's look at the types of shifts and fee changes that have been announced recently. Some banks have stopped offering free checking without a monthly maintenance fee, while others have stopped enrolling new customers in their rewards programs. In the first instance, the banks are holding onto free checking but finding ways to limit the bleeding. In the second instance, the banks are trying to close off a soon-to-be-losing account feature while they decide how to retain core deposits and replace lost revenue.

Some banks have already instituted high minimum balances for rewards programs or have started to make shifts in fee structure. This includes higher fees for stop payments, overdraft protection, wire transfers, bank checks, and ATM withdrawals. Others have changed a policy where they will allow only five withdrawals from other banks' ATMs. And some banks are setting new charges for statement printouts at ATMs. I suspect we will see many more changes by July 21.

At a recent industry conference, I was a bit surprised by how few bankers admitted they had fully analyzed the impact of the regulation changes as they currently stand and by how few had developed a strategy for fee replacement. Many banks I talked with were waiting to see how things unfold and think of themselves as "intelligent followers." For many, the need for certainty on the final regulation approval and an understanding of how their competitors will act outweighs the need to implement their own changes now. Clearly, business analytics must work out the scenario planning and provide ranges of revenue on targeted expectations. What is obvious is that most banks are now focused on lowering their operating costs for delivery. In either case, Nolan has the experience and insight to help.