Don’t let that data you’re sitting on go to waste
Banks increasingly find their businesses challenged by fintech startups that often look to attract new customers by undercutting banks with free or low-cost services. These newer players typically provide such cheap financial services, such as Venmo’s free peer-to-peer payments or neobanks like Chime that charge no overdraft or foreign transaction fees, in order to later monetize the user data they collect.
Banks now must face a future where traditional revenue sources — like transaction processing fees — could dry up as customers flock to low-cost fintech offerings.
To compete in this future, banks need to take a page out of the fintech playbook and explore new revenue sources built through data monetization. While this can seem like a risky prospect for financial institutions in an era rife with privacy concerns regarding personal customer information, taking this step is important for maintaining future profitability.
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