EXCLUSIVE: “Pay-back Time” – Anna Porra, Marqeta in ‘The Fintech Magazine’

In today’s battle for customers, banks need to seriously up their reward game, says Anna Porra, European Strategy Director at Marqeta

For years, financial institutions have relied on the fact that, statistically, you’re more likely to get divorced than change your bank.

But, according to Marqeta’s 2022 State Of Consumer Money Movement Report, based on surveys in the US, Australia and the UK, customers (in the latter two countries, at least) now consider ditching their bank almost as readily as they would dump their partner. Twenty-six per cent of those surveyed who use a traditional provider as their main bank, already had an account with a digital neo, and another 26 per cent of customers said they were thinking about changing banking providers. So, what would incentivise them to leave?

“Nearly six in 10 (59 per cent) of US consumers surveyed rated cashback number one, followed by airline miles and multi-purpose points. Two-thirds (66 per cent) of younger consumers listed offers from merchants where they shop as their top reward choice,” says Anna Porra, European Strategy Director for Marqeta.

Motivating customers to open new accounts or switch the ones they have is challenging banks to come up with inventive temptations. In the UK, for example, savings and investment app Chip recently launched a zero-interest deposit account that gives customers the chance to win tens of thousands of pounds every month – the more deposits a customer makes, the greater the chance of winning.

“There’s an opportunity for card providers to lean in here, customise their incentives and reward programmes to keep their customers and gain new ones”

It’s banking lotto. Elsewhere, savers have been rewarded with digital scratch cards. As an API-driven card issuing platform, Marqeta stands ready to work with legacy banks and challengers on developing the most compelling offers. Indeed, it was instrumental in helping the investment and banking app Stash come up with a first-of-its-kind reward programme, based on the bank’s Mastercard.

Launched using its new proprietary infrastructure platform, Stash Core, developed with Mambu, the Stock-Back® debit Mastercard allows customers to earn stock and invest when they shop. At the time of writing, the bank had given away 59 million stock rewards.

“Our survey revealed opportunities for personalising credit card incentives and rewards programmes,” says Porra. “Only 26 per cent of survey respondents said their rewards were very personalised to their spending habits. There’s an opportunity for card providers to lean in here, customise their incentives and reward programmes to keep their customers and gain new ones.”

The report also discovered that 75 per cent of people globally have used a mobile wallet in the last 12 months; 67 per cent of respondents said they’d used a wallet more frequently since the onset of COVID 19. That’s significant, because it means it’s harder and harder for traditional banks to remain top of mind with customers if they don’t have the reminder that a physical card represents. In the battle for wallet supremacy, research suggests that anything outside the customer’s top two virtual cards typically results in 40 per cent of those customers moving to other banks or payment methods.

Those in the top spots tend to get used four times as often. And, once the habit has been established, it’s hard to break: only 63 per cent of people said they automatically add a new card. All of which points to innovation and imaginative incentives becoming increasingly important for customer stickability, says Porra.

“There is now a lot of choice in payments and banking for consumers. As more merchants welcome contactless payments, banks and fintechs must work harder to provide a smooth digital experience for their customers. We offer our customers the tools to customise their card programmes, which has led to popular propositions such as buy now, pay later financing and customer loyalty rewards beyond the traditional miles and points.”

In terms of what matters most to consumers, she adds: “To enhance cardholder satisfaction, card providers should focus on delivering what consumers feel are the benefits of credit cards: making their lives easier, getting incentives for purchases, and not having to worry about security.

“We’re in the middle of an explosion of choice in banking, and innovative companies have a lot to navigate to deliver personalised and flexible solutions that fit within their customers’ everyday lives. We’re proud to partner with fintechs like Stash that are changing the way banking is done.”

This article was published in The Fintech Magazine Issue 25, Page 115