Inflation is at multi-decade highs, forcing us to scrutinize where every dollar is going and how to stretch those dollars as far as possible.
In the meantime, we’re fine-tuning the household budgets, sometimes on the fly.
Banyan CMO Andrea Gilman and Copper CEO Eddie Behringer told Karen Webster that financial institutions (FIs) and FinTechs could turn item-level data into new engagement opportunities with their customers as offers are more closely aligned with spending. The same information can help households manage their cash flow more efficiently.
And if the future belongs to the young — to paraphrase that old saying — so too does commerce’s future. Generation Z, noted Behringer, and their parents, find value in payments tools that can help them manage everyday spending — and develop financial literacy along the way.
Too Many Offers, Not Enough Relevance
Right now, said Gilman, there’s a disconnect in commerce: Individuals and families want to save money; merchants can take a more focused approach than they are today.
As she said, most consumers are inundated with offers, delivered in emails and apps that are not all that relevant. Or the discounts are not substantial enough to rouse consumers’ interest.
“What the item level data does in the loyalty space,” said Gilman as merchants use the info to drill down on specific products, “is help merchants tap into these ‘new’ budgets that they otherwise would not have had access to.” That’s especially important to the grocery, drug or big box merchants who, laden with thousands of SKUs, would find it impossible to offer deep discounts across the entire store. Tapping into an individual consumer’s strategic (nearly real time) budget needs, said Gilman, creates the ability to offer an incentive based not only on a category but also an individual, concrete transaction that is relevant to that consumer right now.
“Because everybody is so focused on how to save money, and how to buy the things they need while saving money, these types of offers can be compelling for everybody,” said Gilman.
Getting Data Ready
To get there, to get the better card-linked offers, the data means everything — and connecting the parties does too.
Banyan, of course, operates as a two-sided data item level data network, where the company works with merchants and their partners on one side and the FIs/FinTechs on the other side to enable a data-driven array of use cases.
The readiness to leverage that item-level granular data is there across all stakeholders. At least for the moment, and overwhelmingly, it is the big banks and the larger FinTechs who have been “getting ready” and leveraging item-level data and capabilities to innovate their products and services.
A recent PYMNTS study done in collaboration with Banyan, “Tapping Into The Benefits Of Item-Level Receipt Data,” took the pulse of data-readiness among 351 executives representing FIs with at least $5 billion in assets and FinTechs with at least 1 million active monthly users. A total of 55% of FinTechs generating more than $500 million in annual revenue said that they utilize receipt data for most or all of their operations and 41% was the share of banks and FinTechs that are very or extremely interested in using receipt data to mitigate fraud. Overall, 95% of surveyed FIs and FinTech firms already used receipt data to support activities at some level.
And there’s a strategic benefit, too. As many as 78% of firms highly interested in using receipt data to manage loyalty and shopping offerings believe consumers would switch to institutions that provide solutions that use receipt data
“These firms are not just investing for the pure ‘joy’ of innovation,” said Gilman, “but, really, to drive superior experiences and financial services and to get people to switch.” In doing so through the network model, they do not want to have to build the networks themselves, to go out there and strike up the relationships with individual merchants and to organize that data around a common schema.
See also: Where Today’s Receipt Data Falls Short for FIs and FinTechs
To that end, said Gilman, “as we build this network, we are creating the infrastructure for the banks and the FinTechs to build on top of — and to focus their time on creating their customers’ experiences.”
Generation Z a Key Market
The targeted offers can be especially important to the younger generations — those consumers who, as time goes on, will have the lion’s share of purchasing power.
FinTechs like Copper — which offers parent-supervised banking services to younger consumers such as personalized debits — are also “data ready,” said Behringer, and seek to use that receipt-level info to guide families towards healthier financial lifestyles. Merchants also would do well, he said, to leverage item-level information to extend targeted, personalized offers to these younger consumers online or in the aisle.
Generation Z is an attractive demographic for merchants considering Banyan’s two-sided network and the ability to “zero” in on offers that have relevance to purchases (and saving money) while better understanding spending behavior.
Teens, and Generation Z, said Behringer, “vote with their dollars. They have an awareness and an affinity for the brands they purchase from and for the products they purchase.”
See also: Gen Z Takes the Connected Commerce Torch From Millennials
Along with that affinity, he said, teens have a hyper-awareness — unlike any generation before — of the financial missteps of their forebears in taking on too much credit card debt to pay for things. They’re ready to learn from what the data is telling them.
Of Gen Z, he said, “this is a generation that has really bought in to knowing where they are spending and how they are spending.”
The Copper app, he said, is focused on “onboarding millions of teens and their families into the financial system — with ‘Trojan Horses’ that build the right financial habits, long term.”
Better visibility into that spending, with receipt level data, he said, “gives families to the chance to have the right conversations … about budgeting.” Item-level data, said Gilman, lets teens/parents see receipts in banking apps to take note of what they’ve bought and when — and have those purchases presented across a variety of spending categories.
“This helps foster those conversations about what’s important to, and a spending priority for teens,” said Gilman, “and how their spending should look over time.”
A digital, detailed view into purchasing history lets teens see the trade-offs between what they spend and what might be keeping them from reaching their desired savings goals (such as for a trip or a new phone).
As receipt data improves visibility throughout the commerce ecosystem, “It’s a win-win all around,” said Gilman. “The merchant’s able to drive incremental sales to their store. The consumer saves money on things they want and need to buy, and the FinTech and the banks are able to increase top of wallet and spend.”
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