The Financial Brand Insights - Fall 2022

they become. Regular, recurring payments make account holders sticky. 2. Subscription management Do you know how many subscriptions you personally have at any given moment, when they’re likely to auto-renew and how much that renewal will cost? Most people don’t. This represents an opportunity for financial institutions: subscription management. Financial institutions can deepen relationships with their account holders by providing transparency about all of those little subscriptions they signed up for. One large financial institution provides account holders with a monthly run-down of their subscriptions that are coming due the following month. Another gives its account holders an alert when a subscription charges a fee. Change The Narrative: Customers want subscriptions, but they worry about affording them. Financial institutions can help customers track and manage subscriptions.

Account holders that consistently make subscription service payments on time show they have strength in at least one path of their journey, and provide insights for a financial institution to expand upon from a relationship perspective. This audience may include good candidates for other products and services that can drive additional revenue to the financial institution. Driving Revenue from Recurring Payment Transactions Two key elements will help banks and credit unions to successfully stand up a program to tap the subscription payment revenue stream. One is merchant payment cleansing , which provides a clear line of sight into your account holder’s recurring spending, identifying the merchants and their type of business. This data can be used to model customer spending behavior, analyze opportunities for revenue growth and enhance customer experiences, including lowering risk of fraud by identifying when fraudulent transactions may have occurred. Having merchant payment cleansing

What It Means for Banks and Credit Unions

also cuts down on calls to support centers, leading to lower expenses from calls related to transaction confusion. A second element is customer insights combined with marketing automation . This combination identifies specific account holders who are making recurring subscription payments. They can then be marketed to in a relevant way with the help of the right data partner. ▪ To learn more about how to leverage the growing subscription economy for your financial institution, please get in touch. Insights + Automation: Financial institutions can turn recurring spending insights into action with meaningful marketing campaigns that deliver the right message through the right channels at exactly the right time.

Everyone’s getting subscriptions for everything. What does it mean for financial institutions? In two words: revenue potential. Account holders need to pay for those subscriptions and they have a choice of payment vehicle when signing on the virtual dotted line. If they choose the debit or credit card issued by their financial institution, those transactions will provide increased interchange revenue for banks and credit unions. But, if they choose bill pay or ACH transactions, revenue opportunities will bypass the financial institution. Incentivizing account holders to make those recurring subscription payments on their debit or credit card can flip that customer expense into financial institution revenue. There are three factors banks and credit unions should consider regarding subscription- related services. 1. Primary financial institution status is key Not too long ago, an account holder’s brick-and- mortar bank or credit union was automatically their primary financial institution. But in a world where account holders are meeting their financial needs in varied ways, primary status isn’t as clear. Today, consumers are just as likely to borrow money from nondepository institutions as they are from traditional banks and credit unions. Today’s banking consumer identifies their primary financial institution as the place where they get their direct deposits and pay most of their bills. The more the consumer relies on that account for transactions, the more “sticky”

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Any consumer with multiple auto-renewing subscriptions can see the value in that transparency. But their financial institution can aggregate this useful information only if the account holder pays for subscriptions through them. That’s a big benefit your account holders

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might not know about, so tell them. 3. Identify positive financial wellness

Assessing the positive financial health of your account holders through recurring payments on standard budget items like utilities, mobile service payment, insurance payments, ecommerce, daycare and subscription services can be simple using the right data.

Keep Consumers Engaged: Regular, recurring payments make account holders "sticky."

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THE FINANCIAL BRAND INSIGHTS FALL 2022

THE FINANCIAL BRAND INSIGHTS FALL 2022

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