Central Bank: The Chexsystems(Sm) Qualifile(R) Decision
Harvard University - Accounting & Control Unit
Francisco de Asis Martinez-Jerez
University of Notre Dame - Department of Accountancy
Emily McClintock Ekins
Cato Institute; Reason Foundation
University of Oxford - Said Business School; National Bureau of Economic Research (NBER); University of Oxford - Said Business School
July 19, 2007
HBS Case No.: 208-029
SUBJECT AREAS: Banking, Commercial banking, Customer acquisition, Risk management.
The "Central Bank" series analyzes the use of information and product design for managing the counterparty risk of newly acquired customers. Central Bank, a mid-sized regional U.S. bank, was attempting to grow its customer base by increasing the number of new checking accounts. Like many banks, Central saw checking accounts as an important tool for customer acquisition and loyalty-building. However, the bank realized that the aggressive pursuit of new accounts could result in an increased number of overdrafts and, ultimately, customer defaults. The first case, "Central Bank: The ChexSystems(SM) QualiFile(R) Decision," analyzes how QualiFile, a debit scoring product commercialized by ChexSystems, can be used to manage this risk.
Date posted: September 18, 2008