Financial Organizations See Business Opportunity In HSAs

Fifty-four percent of the survey's 137 respondents said they were currently offering HSAs, while another 26 percent said they planned to offer HSAs within 12 months. The numbers fall in line with a July 2005 TowerGroup report that expects HSA deposits to grow to more than $26 billion by 2010.

Generating new accounts and increasing cross-sell opportunities were cited by more than two-thirds of respondents as reasons these organizations were offering or planning to offer HSAs. Organizations also believed HSAs could help them: increase deposits (62 percent), enhance commercial account relationships (41 percent), and generate fee income (28 percent).

Fifty-seven percent of respondents who are not offering or are not planning to offer HSAs cited low customer demand as the number one reason for not offering HSAs.

Other reasons for not offering or planning to offer HSAs within the next 12 months included a lack of knowledge regarding the product (24 percent) and a belief that HSAs would not fit well into the organization's product mix (19 percent).

"The results of this survey confirm what thousands of financial organizations are telling us," John Bryant, senior vice president of banking for Wolters Kluwer Financial Services, said. "These organizations -. which range in size from small community banks and credit unions to some of the largest financial organizations in the country -- have told us demand for HSAs is growing, and meeting that demand is helping them build deposits and revenues, strengthen existing relationships, and sell other products and services."