Although the recession may have dealt its worst blows, banks are adjusting to a new environment, one with stricter regulations, fewer opportunities for big risks, and heavy sentiment against them.

In that light, Mintel Comperemedia, a provider of direct marketing intelligence, is forecasting five major changes for banks in 2010.

"Based on evidence from recent direct marketing, I see waves of change ready to wash through the banking industry," says Susan Wolfe, vice president of financial services at Mintel Comperemedia. "From the fall of free checking to the rise of comprehensive banking rewards programs, banks seem poised to make 2010 a year of innovations. The biggest challenge will be finding new opportunities for revenue."

The end of "free checking"

It's been a marketing mantra, but this year, the cry of "free checking" will start to fade, Wolfe believes. In 2009, fewer than half of checking direct mail offers promoted free checking, down from three-quarters in 2007-2008. "With pending regulations on overdraft fees, banks risk losing a major revenue source," she said. "Charging fees on checking is one way to recoup income." Some banks may implement monthly fees, while others will let customers decide which perks are worth paying for, similar to the "Build to Order" checking account from BBVA Compass.

Bigger rewards programs

With the decline of free checking, Mintel expects an increase in rewards checking and more specifically, rewards banking. As financial institutions look for ways to appeal to new clients and make current customers more loyal and profitable, they'll start offering rewards for more than just debit use. Capital One, for example, introduced reward checking in late 2009, linking to its credit card rewards program so customers could earn points faster.

Programs designed to increase deposits

Another way banks will try to increase revenue in 2010 is by creating automatic account builder products that boost deposits. Industry leaders Bank of America and Wachovia already feature innovative savings programs -- "Keep the Change" and "Way2Save" -- and Capital One has just launched "SmartCents" checking. Deposit-building accounts get customers invested in multiple products, while helping banks secure more deposits.

More aggressive debit card marketing

Mintel has seen direct mail decline across financial services categories, but debit card volume remains strong at nearly 67 million offers in 2009. "I expect we'll see more aggressive debit card marketing this year because banks are using debit fees to increase revenue," Wolfe speculates. "Direct mail may not increase, but I expect to see more cash incentives and other perks that encourage debit card usage."

Cash incentives increase and expand

Cash incentives are a hot direct marketing tactic for checking accounts, appearing in most offers. In 2010, cash incentives will grow even more enticing. Mintel Comperemedia has already seen $200 and higher from Capital One and Key Bank. The company expects banks to start using cash incentives for other types of deposit accounts, too.

While the Mintel prognostication doesn't mention it, a change in the way in which banks deal with their customers might go a long way toward increasing the industry's bottom line. Complaints to from bank customers indicate the treatment consumers receive is a major gripe.

Scott from Jacksonville, FL, says BBVA Compass Bank charged him $76 in NSF (non sufficient fund) fees for withdrawal transactions that occurred on the same date as a deposit which covered the amount of the withdrawals. "The explanation was that 'withdrawals are processed before deposits.' They seem unwilling to reverse the charges. I don't like being ripped off, especially in these difficult economic times. The executives of this particular bank are absolutely ignorant if they think I'm going for this. This is an example of very poor customer service and as a result, the bank has lost my business permanently."

Freddie from Rex, GA, tells of a terrible experience he had discussing an account problem with a Bank of America representative. "As the conversation begin to progress she begin to act cold & heartless acting as if I done something wrong by questions her about my credit. When I expressed my concerns over her closing my account without my permission & how I wanted to protect my credit she stated she didn't care & close the account anyway. One person can really ruin a great banking relationship & experience with awful customer service."