Welcome To
The Bottom Line

The annual budget process is usually an exercise in planning for uncertainty. Add to that, it’s challenging, time consuming, and complicated. Then, when finalized, all you know for sure, is that it is at best a pro forma. That’s because financial institutions (along with everyone else) operate in an environment with multiple variables they do not control…and that has become even more evident in 2020.

Top-of-wallet status is highly coveted because, once achieved, the incumbent – in this case the card issuer - has the advantage. Old habits die hard. Once a consumer develops a “go-to” card for certain types of purchases, they tend to repeat that pattern of behavior.

Those habits can be cultivated by offering benefits to the user via a rewards program. Sometimes the choice can be situational, with cardholders designating certain cards for specific types of purposes. This may extend to the type of card – e.g., debit or credit – and/or a workflow established by the merchant which makes it easier to use one card rather than another – e.g., Walgreens Express Pay.

Knowledge is power and most bankers have figured out that they’re sitting on a treasure trove of information about the consumers and businesses they serve.  However, using this information to empower their account holders and deliver services tailored to their needs has been a difficult goal for banks and credit unions to achieve. 

One of the many changes brought by COVID-19 was an acceleration in the participation of the delivery economy.  This level of participation is likely to continue to rise as more businesses develop viable online ordering and delivery offerings.  Companies such as Amazon, Google, and Apple have made personalization of offers and the anticipation of the consumers’ needs prerequisites to any successful online engagement.  So, as the delivery economy expands, successful offerings will need to reflect these same characteristics delivering the convenience and speed consumers now consider mandatory as a basis for loyalty.