The news: Bank of America is adding another offering meant to limit customers’ exposure to overdraft fees. It also disclosed that its existing products are gaining traction.
The banking giant unveiled Balance Connect, which lets customers create a prioritized list of up to five outside accounts to automatically transfer funds from in case of an overdraft.
Separately, BofA disclosed milestones for the following:
More on this: The bank’s rollout marks the latest sign of a growing backlash against overdraft fees in the US:
The bigger picture: BofA’s product reflects a growing trend by established banks, blunting what has been a competitive advantage for digital challengers.
In recent months, incumbents have taken actions against the fees:
The established players’ approaches complicate neobanks’ efforts to gain customers, particularly for persuading them to pick the challengers as their primary banks. Neobanks will also be hard pressed to come up with new ways to stand out with their products moving forward.
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