The most salient point coming from a webinar held in late May by loyalty rewards vendor Truaxis focused on how retailers are primed to pay cold, hard cash to financial institutions to better market their products and services. Why? FIs are sitting on a goldmine of customer data. Banks know what consumers are buying. Yet, banks largely haven’t taken advantage of the opportunity to date.
“Data is a huge, untapped asset that most financial institutions are sitting on,” said Schwark Satyavolu, chief executive of Truaxis, during the webinar. “That data is the biggest asset.”
Though merchant-funded rewards are a great way to step into the market, Satyavolu believes FIs’ data has much broader implications than just that functionality.
“Merchant-funded rewards are great, but there are more opportunities,” Satyavolu said.
Those opportunities, broadly labeled as personal services, will better blossom as the mobile channel continues to mature and provides even more customer data to banks. In turn, a large institution can “give a small banker type of experience [to customers] by creating very personal experiences for them,” said Satyavolu.
By offering “personal services,” the bank card becomes much more than a way to pay for something, he argued.
To support his message, a Forrester analyst also joined the call to talk up the business possibilities within bank’s data.
“Banks need to realize that all the information [they] are sitting on is valuable outside of their our own organization,” said Brad Strothkamp, an analyst that specializes in eCommerce/eBusiness strategy for financial services.
Strothkamp pointed to how retailers pay millions of dollars to buy keywords on Google and Yahoo and ads on Facebook; yet, banks sit on the very data that could be “ten times more valuable” to retailers. Banks’ data is “so much more granular” as it relates to what customers are buying and includes insights on other consumer behavior, such as when they are changing addresses, he said.
“Monetizing the bank’s data is in its infancy,” said Strothkamp. “It’s broader than merchant-funded rewards….Merchant-funded rewards might be the toe into the door of technology.”