While most taxpayers dread the annual burden associated with the IRS and April 15th, for the nation’s top tax preparation firm — and those individuals lucky enough to be getting a refund — it’s a great time of year for building new business and developing new routines that involve better financial management.
In the wake of its new Spruce mobile banking platform launched last week, H&R Block’s Chief Financial Services Officer Les Whiting told PYMNTS the 60-year-old firm is using its strong brand recognition and 20+ million existing customer relationships to fill what it sees as a gap in the market and make the most of the one-time event of getting a refund.
“There are 35 million Americans who don’t have adequate banking solutions,” Whiting told PYMNTS’ Karen Webster, without saying where that figure came from. “They’re fed up with what they see from their traditional financial providers,” he added, whether that be the banks, neobanks or other solutions in the market today.
To be sure, the launch of Spruce, and its debit card and connected savings account that let consumers budget for their goals, is not a new concept — it enters a crowded marketplace filled with aggressive FinTechs and neobanks.
But the Kansas City-based tax-prep giant said its built-in funding source of IRS refunds, lack of customer acquisition costs, and brand recognition with trust and technological capabilities built over decades and millions of households makes H&R Block (HRB) unique.
“So for us, it was really about just seeing that there’s still a huge gap in the market that’s not being met,” Whiting said, “and our customers continue to show us that they’re looking for an alternative from a brand that they know and trust.”
‘Frankly Better’
It’s not as if HRB itself hadn’t already been issuing debit cards and enabling customers to fund them with their tax refunds, but Whiting said many consumers were using its “Emerald card” program as a day-to-day bank account.
“We see them every year — they get a new Emerald card and off they go,” Whiting recounted of the spend-down mentality that many customers used.
But the reality is, Emerald wasn’t built or designed to do that, he said, whereas Spruce was created to meet entirely different needs in a completely different market environment.
“To help those customers with, frankly, a much better product that really serves their day-to-day banking needs and helps them be good with their money,” he said.
To that point, HRB is looking to take on existing players on the fee front; Whiting said customers, many of whom can scarcely afford it, are paying their existing banks monthly account fees and “pesky, hidden overdraft fees that really have a huge impact on the customers that we serve.”
PYMNTS’ data show that over 125 million U.S. consumers are currently living paycheck-to-paycheck: roughly 60% of the population is able to pay their bills comfortably, while close to 40% struggle to keep up.
From HRB’s perspective, aided by over 12 million hours of intimate client consultations annually plus countless more time spent on its online sessions, it sees millions of customers that are struggling, too.
“The demographic of our customers covers the gamut, a wide spectrum of the U.S. population,” Whiting said. “We think Spruce, specifically, is going to help the millions of customers that self-identify as financially struggling, who either consider themselves financially coping or financially vulnerable.”
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