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Walmart Bank: Checking Accounts At Walmart?

The Walmart Bank

As if technology giants like Apple and Google weren’t enough competition for the nearly five thousand banks and thousands of credit unions in the United States, Walmart plans to launch a “checking account” of its own. There has been much speculation over the years regarding Walmart entering the financial services industry and in many ways, this has already happened with the various financial services offered to its customers through partnerships.  These include money transfers, pre-paid debit cards, and the ability to cash checks at stores across the U.S.

What does this mean for traditional brick-and-mortar banks and credit unions?

Walmart is the largest private employer in the United States with 1.6 million employees.  It also has nearly 4,700 stores across the country.  In launching a checking account that would likely be attractive to many of its employees, One,– the fintech company Walmart is working with that will deliver the new services, will instantly become one of the largest banks in the US.

How can IFM help?

Customer retention and mitigating deposit outflows in a time of rising interest rates are top of mind for traditional financial institutions in the US today.  IFM’s services provide the means for an FI to detect changes in their customers’ financial behavior, which is important for financial institutions to know and understand.  With that understanding, appropriate strategies and marketing outreach can be developed and deployed that will deepen relationships with existing customers and retain and grow their deposits.

For additional information about how IFM can help you identify customers that may be early adopters of Walmart’s new financial services company, and to learn about other deposit retention and growth strategies, contact IFM at our website, www.infimark.com, or communicate with me directly at [email protected].

 

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A Quick Guide To Bank Deposit Growth
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What Does Personalization In Financial Services Mean?

Recent studies showed that 52% of consumers expect their offers to be personalized, and 62% want firms to anticipate their needs. This is excellent news for financial institutions who are looking to leverage innovative approaches to understanding their clients better while deepening their engagement.

Now is the time for your FI to gain a competitive advantage by capitalizing on the power of personalization by offering a more user-centric and solutions-based experience for your customers.

To do that, though, you have to understand the power of personalization. Let’s discuss the concept in more detail.

Personalization in Financial Services

Personalization in financial services focuses on transforming a firm’s customer interactions using data and analytics to anticipate individual needs and build deeper relationships.

It is not all about selling, but providing information about the FI’s products and services on a regularly occurring basis.  By doing so a financial institution can transform itself into the go to source for a consumer or business’s financial needs.  This strategy demands recursive learning, a 360-degree view of customers, and a personalized curriculum intended to change customers’ behavior and attitude.

Numerous firms have shown how personalization is vital. Netflix, for instance, uses personalization techniques to provide movies and TV show recommendations. Starbucks uses digital partnerships and technologies to build relationships with millions of consumers across its 7,000 stores.

That said, while most FI’s are significantly investing in their data and analytics capabilities, the “Netflix of banking” has not yet emerged. The primary reason is that real end-to-end personalization means deploying data science capabilities that utilize clean and accurately categorized transaction data delivered daily.

Eventually, if done perfectly, personalization can offer a direct route to reduced customer churn rates and higher sales. It can lead to yearly revenue uplifts of up to 10% for financial service firms. It will enable firms to truly understand their clients, anticipate their needs, and engage in rich dialogues about their financial capabilities, fostering loyalty that lasts a lifetime.

 

A Quick Guide To Bank Deposit Growth

 

What Are the Perks of Personalization?

Here are some of the benefits of personalization:

  • Studies estimate that for every $100 billion in assets a financial institution offers, it can achieve over $300 million in revenue growth by personalizing customer interactions.
  • Personalization also helps drive sales communication, even though these might not be the most frequent interactions. Some financial service firms have used personalization to boost branch sales productivity by over 30%, while others have seen an increase in revenues by 20% in three years.

Examples of How Financial Service Firms Can Deliver Personalization

Three core elements form the foundation of banking personalization at scale:

  • Analytic Engine & Recursive Learning – by using systematic experimentation, financial institutions allow flexibility and create tailored offers that evolve with time. The recursive learning ability needed for personalization constitutes a built-in advantage for individuals who leverage it first
  • Consumer DNA – bank systems need to feed a single, enterprise-wide view of every consumer—a view that systematically reflects every customer at any given time
  • Personalized Curriculum – consumer offerings are customized to one segment. They define desired consumer behaviors and strategize on how best to incentivize those behaviors

Final Thoughts

Financial institutions today are not just competing against each other but against technological powerhouses that harness data to their advantage. To keep up with the changing environment, FI’s have to revamp their approach to serve their customers at a personal level.

With proper personalization, FI’s can decrease friction in their customer journey and attain higher engagement.

For the past 20 years, Insight Financial Marketing, L.L.C., has provided financial institutions with customer insights from the analysis of customer financial transactions such as ACH, debit card, credit card, and wire data.  These insights are typically leveraged to help deepen relationships with consumer and business customers.

With IFM’s data analysis sophistication, financial institutions can better understand the unique changes in their customers’ financial lives as they happen to enable the financial institution to enhance marketing messaging resulting in outreach that is well received by their customers.

 

Contact IFM

 

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Insight Financial Marketing Celebrates 20th Year Anniversary

20 years of innovation, development, and trustworthy business practices mark the milestone.

IFM’s services provide financial institutions with large-scale transactional analysis and consulting identifying opportunities to help strengthen and grow their client relationships. Founded on July 16, 2002, IFM began analyzing Automated Clearing House transactions for marketing purposes and fraud detection, considered a unique capability by the financial services industry. Over the years, IFM developed an extensive and sophisticated processing methodology for translating and categorizing transactions that enhanced their ability to produce customer insights for financial institutions.  As IFM’s capabilities matured, their analysis expanded to include all bank data types.  

Most recently, IFM’s services have been leveraged to enhance A.I. and machine learning initiatives,  advanced analytical capabilities to smaller regional and community-based institutions, and product expansion providing alternative data insights that, according to the Consumer Financial Protection Bureau (CFPB), can provide numerous advantages to financial institutions including enhancements to their credit lead qualification and underwriting.

The foundation of IFM’s success has been the firm’s unwavering commitment to innovation and excellent service, and the founding partners’ focus on enhancing the personal and professional well-being of all of IFM’s employees. 

 

IFM Senior Partner, Michael Uline reflected on the company’s 20th anniversary by saying,

“For several years IFM had to educate banks on how to use transactional information to provide a better product and service to their clients.  Today, banks expect to use transactional information to improve their client relationships. IFM is a pioneer in transaction analysis and over the 20 years I am most proud of our team.  We have built a core set of employees that are experts in providing a responsive and accurate result to our clients.  It is because of our team, that we have had loyal clients for more than fifteen years.”

 

John Donohoe, IFM Senior Partner, added, 

“I am ever grateful for our successful twenty years and am thankful to our customers and our employees who have not only made our twenty years successful but have provided a great environment to grow our opportunities and build on our historical success. I look forward to many additional years of achievements with our new product offerings, new distribution channels, and our adept colleagues.”

 

IFM wishes to thank all its valued customers, strategic partners, and especially those who have been loyal to IFM since its inception.

About IFM

Over the last twenty years, IFM has developed an industry-leading customer intelligence platform for the financial services industry.  From our company’s founding in 2002 IFM has grown to serve many of the largest financial services firms based in the U.S., large international institutions with U.S. operations, and regional and community-focused institutions.  Our analytical sophistication has expanded across all bank data types delivering a wide range of profitable solutions from customer knowledge and cross-marketing leads to campaign management and professional services.  Learn more about at www.infimark.com.

Contact

Rob Reale
Associate Partner and National Sales Manager
Insight Financial Marketing
[email protected]
567 Harbor Side Street • Woodbridge, VA  22191 • (703) 490-3226
2626 E 82nd St, Ste 230 • Minneapolis, MN  55425 • (952) 432-1482

 

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EBook: A Quick Guide To Bank Deposit Growth

 

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Personalized Marketing to Bank Customers

Right now, the transactional profile of a consumer checking customer at financial institutions across the US is likely to include a P2P account with either PayPal or CashApp and a newly established Coinbase account as customers’ education and investment in cryptocurrency continues to grow.  They are making regular monthly payments to a SoFi student loan, Rocket Mortgage, or Prosper personal loan, many are using their Apple credit card, and are regularly adding and storing money onto their Starbucks or Dunkin apps.  From a small business customer perspective, many are using QuickBooks for their accounting and payroll, using Square’s merchant services, or have a small business loan from PayPal or American Express.

 

A Quick Guide To Bank Deposit Growth

 

As consumers and businesses have rapidly adopted app-based financial tools and services, many-core transactions are conducted with competing institutions.  Given these customer scenarios, how will your financial institution (FI) grow loans, prevent customer attrition, and maximize profitability?  Can your bank’s strategy compete in today’s digital and fast-changing world? 

Regardless of the geographic area your traditional bank or credit union serves, these might be the profiles of many of your consumer and business checking customers.  Understanding what attracted them to engage with competitors is paramount to the development of a strategy to win them back.  Proactive strategies that include identifying the changes in your customers’ financial behavior, life events, and lifestyle changes, on a daily basis, can effectively provide your FI with the insight to help implement a direct, specialized, and personalized experience for customers that will in effect strengthen their relationship with your FI instead of continuing to send them to the competition.  

For 20 years, IFM (Insight Financial Marketing LLC) has worked with financial institutions of all sizes across the US to provide cutting-edge data science technology to financial services firms.  IFM’s data tools offer an industry-leading customer intelligence solution that enables personalized communication with your FI’s consumer and business customers.  

If you’re interested in learning how your FI can leverage daily customer intelligence, data, marketing tools, and strategic guidance to compete more effectively today and in the future, we invite you to communicate with us directly at our website www.infimark.com or contact me at [email protected]. 

 

Contact IFM
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[Webinar] Outlook for the Future – Bank Strategy During COVID and Beyond

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Bank Strategy During COVID

 

In 2020, At the height of the COVID-19 pandemic, Insight Financial Marketing held a webinar titled, Outlook for the Future: Bank Strategy During COVID-19 and Beyond. From our discussion, it was clear how big of a role technology played in economic recovery.  We also saw banks receive increased deposit balances, as CARES Act-related assistance was disbursed to consumers and businesses.

This year we felt it was only fitting to share an update regarding the same topic, looking at bank strategy amidst the continuing impact of the pandemic and beyond.

In the presentation, we put a spotlight on three topics:

  • The pandemic’s impact on the economy and the Financial Service Industry
  • The continuous impact technology has on the Financial Service Industry
  • Actions needed for Traditional Financial Institutions to survive the future business environment

 

A Quick Guide To Bank Deposit Growth

 

COVID Impact Review

In 2020, we saw businesses close their physical offices, reopen, and for some, shut them down again. Moreover, Financial Institutions supported small businesses by rolling out PPP loans and enhanced Federal Stimulus payments quickly to help cushion these companies from the unprecedented shocks of COVID-19.

According to the Deloitte Economic Spotlight, in May 2021, there were 7.1 million fewer people in the labor force this year as opposed to February 2020. Deloitte further adds that the pandemic significantly affected employees in low-wage occupations by 5.4% compared to the higher-wage populations, which stood at 2%.

We also highlighted COVID’s impact on lending. The most notable change was the decreased rates in mortgage interests in 2020. And as of October 2021, there was a seasonal slowdown, specifically in the real estate market.

Investors Reaction to COVID-19

A review of the Nasdaq, Dow Jones, and S&P 500 indexes shows the pandemic led to a dramatic lagging of the financial market at the onset. However, in 2021, due to the multiple Federal Stimulus packages that were rolled out, the markets recovered and have increased significantly.

Outlook for the Future: How the Changing Economy Will Affect Bank Strategy and the Financial Services Industry
As for the future of retail banking, data shows that:

  • There might be an uptick in interest rates in 2022/23.
  • Due to the success of the economic assistance programs, there is an increase in the money supply.
  • Fintech and technology firms will transform how money moves.
  • As we move forward, the top 2 traditional banks will continue exerting competitive pressure.
  • Outlook for the Future: How the Changing Economy Will Affect the Financial Services Industry
  • We also discussed the changes occurring in the financial services industry, influenced by technological solutions.

FinTech companies continue to succeed because of their customized solutions that meet business and consumer needs. For instance, American Express recently established a digital business checking account for SMBs.

Decentralized finance is becoming more popular—owing to its ability to meet specific needs. With blockchain, traditional areas like saving and investments will in the future not require middlemen such as brokerage firms.

FinTech companies have become more ‘bank-like.’ For instance, Venmo has grown its offerings to include services like debit and credit cards, traditionally bank services.

There’s an increasing rise in neo-digital banks that indicates the dynamic nature of consumer behavior.

As for cryptocurrency, the number of coins and wallets continues to grow. Moreover, the terminology and technology continue to change.

Outlook for the Future: Actions FI’s Need To Make To Survive the Future Business Environment

To close the presentation, we discussed the practical steps FI’s needed to take to enable their future success and survival. First, FI’s will need to identify their value proposition. Traditionally the focus has been on financial products and services that meet customers’ desires.

However, with the advancement in technology, we’ve seen a shift in customer demands. For instance, people now expect instant solutions. And as a result, the traditional face-to-face approach is less favorable, especially from a COVID-19 standpoint. Additionally, more people want to perform basic transactions online, as it is more convenient.

Secondly, analyze your FI’s competitive edge. Once you’ve figured this out, work on implementing strategies to improve the customer experience further. Remember, while technology is the future, we certainly can’t ignore the power of good customer relationships.

Finally, your institution’s ability to stay updated on behavioral trends and lifestyle changes will provide the required customer insights that will increase your competitive edge. From payments to money transfers, leveraging data on consumers’ financial activities coupled with new technology is the most straightforward bank strategy that will deliver continued success and survival.

Contact us today to take advantage of our free, no-obligation evaluation offer to get a first-hand view of your consumer and business customers. To learn more, visit us on our website at www.infimark.com.

Contact IFM

 

Bank Strategy During COVID

 

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Outlook for the Future: Bank Strategy During COVID-19 and Beyond

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Insight Financial Marketing recently presented a webinar called: Outlook for the Future: Bank Strategy During COVID-19 and Beyond.

We discussed the rapid changes to the economy as well as the impact on the financial situation of consumers and businesses. Now more than ever, financial institutions must have a deep understanding of the financial needs of their consumer and business customers. If your FI has not adopted a strategy to leverage intelligence from your bank’s data to help identify customer behavior trends, it will be more difficult to keep and retain customers because of their rapidly changing needs.

The New York Times recently reported a graphic showing how states are at different stages of reopening across the country. Some are open as normal, some are reopening, some having paused their reopening, and some have reversed and are imposing new social distancing and business closings. The graphic shows how states have proceeded with balancing the spread of COVID-19 by reopening their economies. Even within the footprint of your financial institution, your customers’ financial situation may vary depending on where they live and work.

We also shared insights on how investors have reacted to COVID-19 and economic uncertainty.

Two points here:

    1. Investors have rewarded technology firms as consumers and businesses have shifted their digital behavior.
    2. Retail investors are much more active in the markets due to technology applications that have facilitated free stock trading (driven primarily by the growth of fintech firm Robinhood).

The spending behavior of consumers has been shifting as well. The top earners have dramatically reduced spending while the lowest earners have remained the same. We discussed how the CARES Act has led to a rise in deposits, especially for the largest banks in the country.   In addition, most financial institutions have seen a more modest rise in deposit balances compared to the top 5 largest banks in the US.   The combination of reduced spending by high-income earners, and the influx of stimulus and COVID relief payments from the government will not continue for long. We believe that deposit retention and growth will continue to be important in the years ahead, especially in a low rate environment.

If you are interested in viewing the 30-minute webinar, please let us know. We will gladly provide a link to view the recording.  In the meantime, check out our latest vlog for a snapshot of the webinar content.

 

 

Insight Financial Marketing is an industry leader in helping financial institutions leverage customer insights, detect behavioral changes, and adopt a strategy to better serve the rapidly changing financial needs of its consumer and business customers. To learn more about utilizing our Intelligentsia™ technology please visit our website.

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