Recapture payment spend and win back wallet share

Our best experiences have become our everyday expectations. Consumers no longer compare a company solely to its closest competitors, but rather to whoever sets the highest standard for the best experience. Consumers crave quality, convenience and more intuitive, personalized experiences. Consumers want the organizations and institutions they interact with to know them, value them, make it easy for them – and, in times of heightened anxiety, such as a pandemic, to provide services that will protect them.¹

When basic needs are not met by a primary financial institution, consumers have demonstrated a willingness to make alternative choices.  This explains the growth that can be seen with neo-banks, digital banks, and products from non-traditional providers such as the Apple Card and a Google checking account. Winning the battle for ever-evolving consumers requires a combination of deep, holistic, insights, and the willingness to design and deliver exceptional experiences.¹

Using the broad scope of customer data available to them,  FIs can develop product strategies that better meet consumer needs, deepen their understanding of a consumer’s complete financial picture, assess consumers’ activity with competing institutions, and ultimately, recapture a larger portion of wallet share.

Jumpstart competitor research by understanding held-away products

Understanding your competition is as important as understanding your target audience. To bring focus to your competitor research efforts, it’s crucial to know the competing institutions your customers elect to fulfill their financial needs and the extent of their relationships beyond your institution. However, generating an accurate and succinct list of competitors and analyzing the impact on your offering is often an arduous task. Leverage your customers’ bill pay data to feed your competitor research.

• Build a list of the competing institutions your customers have elected to transact with by analyzing their payments to held-away products.
• Capture the payment amounts your customers make to held-away home lending accounts to provide a clear picture of the type of loan product required by your existing customers.
• Identify the type of investment firm your customers are transferring funds to on a recurring basis to indicate their willingness to find a new financial advisor.
• Compare and evaluate the set of products customers have with you to those they have with competing institutions to identify opportunities to grow wallet share.

Use these insights and an understanding of industry trends to align your product offerings to meet your customers’ current needs, and to recapture your customers’ financial needs currently being met by your competitors.

We want the institutions we interact with to “know me”, “value me” and “make it easy for me” – and, in times of heightened trust and anxiety, to “protect me”.

– “Me, my life, my wallet”, KPMG International Global Customer Insights

Recapture credit card activity to win back wallet share

For the estimated 67% of households that have a credit card (with an average of three (3) card relationships per consumer), the balance can be a heavy burden. The average credit card debt per household in Q1 2020 was just over $8,500.²

Because this level of debt is so significant, consumers’ need for competitive credit card options will continue to grow. Institutions who understand the number of card relationships their customers have with competing institutions and the payment amounts made to those institutions should take advantage of this information and use it to recapture a portion of that card behavior.

Customers making less-than-significant monthly payments (less than $500 per month) to one or more credit card providers may be more influenceable as they may not have developed insurmountable loyalty to one card provider. Institutions can use this information to cross-sell their credit-card based on their unique rewards program, complementary products, or debt consolidation interest rates. These strategies will help the institution gain a larger share of wallet.

Personalize cross-sell messages to stay top of mind for borrowing needs

The aggregate consumer debt exceeded $14.3 trillion in the first quarter of 2020³, and there appears to be no end in sight for consumer borrowing needs. The debt, while spreading across a multitude of borrowing products (housing (71%), student loans (11%), auto loans (9%), credit card (6%), and other loans (3%)), is hitting record-setting numbers³. As Americans are riding the current economic highs and lows, the one thing that appears to remain constant is the use of credit.

Through the analysis of customer payments to competing institutions, FIs can assess a more complete picture of their customers’ financial wallet. Coupling these insights with knowledge of their life stages, life events and, activities and interests, gleaned from their financial transactions, FI marketing teams can deliver cross-sell messages that keep the institution top of mind for the next borrowing need.  Product teams can leverage this data to develop refinance or debt consolidation product offerings to simplify the financial lives of customers making multiple loan payments.

Applying the basic marketing principle that it takes as many as thirteen touchpoints for a consumer to internalize and/or act upon a call to action, marketing teams have many opportunities to use their data to engage with customers, deliver targeted messages and offer products that will help meet their financial goals.

In the battle for growth, knowing your customer clearly, concisely and holistically is what will separate the winners from the rest of the pack. The critical prerequisite to this knowledge is data.

– Julio Hernandez, Customer Advisory Lead, KPMG in the US

Partner to develop institution-wide, data-informed strategies

Solutions that provide this level of insights from transaction data are virtually nonexistent. But Segmint’s proprietary technology, extensive AI and automated analytics toolkit, and expert team of advanced-degreed library scientists accomplish this mission with speed and accuracy. The Segmint analytics platform cleanses and categorizes billions of inconsistently labeled transactions, and helps you jump start your competitor research so that you can build products that meet the financial needs of your customers and, ultimately, capture a larger share of their wallet.

These insights are made available to FIs via intuitive visualizations within the Segmint platform or through Segmint’s data services API for ease of integration with an institution’s BI toolset, providing opportunities to analyze the data and identification of data-informed service strategies.

For more information and applicable use cases for activating data throughout the institution, check out previous articles on the following topics:

• Why retail banking strategies should embrace customer financial life stages
• Inform your financial services strategy with customer data
• Start your data-centric transformation before it’s too late

Joan Clark is VP, Product for Segmint, Inc, a provider of integrated data and marketing solutions for banks and other financial institutions that drive account-based growth based on customer financial transaction data.

¹https://advisory.kpmg.us/insights/insights-for-your-role/customer-sales-service-marketing/future-customer-connection.html
²https://wallethub.com/edu/cc/credit-card-debt-study/24400/
³https://www.newyorkfed.org/newsevents/news/research/2020/20200505