|The latest survey published by a leading information group reports client demand are pushing bankers to offer custodial accounts as insurers adopt better HSA offerings. |
The findings reflect research by this publication's parent, customer demand is pushing the growth of Health Savings Accounts.A majority of the nearly 1,200 financial institutions responding to a recent Wolters Kluwer Financial Services survey say they are offering their customers Health Savings Accounts (HSAs).
The report said that the top reason they are doing so is customer demand.
Sixty-two percent of the survey's respondents, a majority of which were community banks and credit unions, said they are offering HSAs while more than one in three of the respondents who said they weren't, are planning to do so in the next three months.
Customer demand topped the list of reasons institutions began offering HSAs (80 percent).
Concurrent with the Wolters Kulwer release, American Banker reported that some bankers already in the space were disappointed with the results so far. They did say demand had picked up considerably in the fourth quarter of 2007.
Information Strategies Inc,(ISI) this publlication's parent, is projecting a significant increase in HSA-insured Americans and in custodial accounts starting January, 2008.
Second on the list was the ability HSAs give them to generate new accounts (58 percent), with increasing cross-sell opportunities (51 percent) and growing revenue (51 percent) also noted as significant reasons.
These findings reflect ISI's predictions made in early 2007. Those findings strongly urged financial institutions to offer HSAs.
Of the nearly 1,200 financial institutions surveyed by Wolters Kluwer, approximately 24 percent said they had no plans to offer HSAs or weren't sure of their plans to do so.
These institutions cited customer demand, lack of understanding of HSAs and lack of management interest in offering HSAs as reasons.
While HSAs are growing in popularity with financial institutions, customers are still in the early stages of adoption, which may explain why customer demand is cited as both the number one reason institutions began or have not yet begun offering HSAs.
The majority of institutions responding to the survey reported a small number of HSA accounts.
Sixty-nine percent of respondents reported 100 or less HSA accounts, 18 percent reported 101 to 500 accounts and seven percent listed more than 500.
"Banks and credit unions know HSAs present them with a significant business opportunity and additional way to better serve their customers," said Dave Roy, vice president and general manager, Banking, Wolters Kluwer Financial Services.
"But it's also evident that this market is still relatively untapped, and the greatest potential lies ahead, especially as healthcare costs continue to climb and consumers look for more effective ways to save and finance those costs," he added.
Wolters Kluwer Financial Services offers financial institutions a comprehensive, compliance-based set of HSA solutions. To review the complete report got www.wolterskluwerfs.com/results.