On Tuesday, Jim Breune posted a story on his Netbanker site that discussed the potential financial windfall for banks (and presumably credit unions) through transaction data driven reward programs. His article was in response to a great open ended question from Christophe Langlois via Twitter.
Per Netbanker, this was the interaction via Twitter.
Here is the full Netbanker post.
I am sure many people in fintech expect Cardlytics to continue its rapid growth, now that they have secured a partnership with Bank of America, but will it be a windfall for financial institution partners, most of which are not direct white-label partners of Cardlytics?
What do you think? Financial windfall or not?
Here was my comment to Jim on the Netbanker site:
Jim, I love the enthusiasm (as always) and also marvel at the way you see adding $600K of additional income to our bank’s bottom line (I just paid for the channel and then some!).
Even though I really like the Cardlytics model, we need a few more things to happen. We need a few more BofA sized banking partnerships to drive adoption, we need to add more contextual and proximity based merchant modeling (and recruit FI customer/merchants to fill in categories and location).
Today, too many of these merchants are national chains and offers are not necessarily directly related to existing behavior. If you shop online and use your debit card at the Gap, does that mean that you also would use a coupon at Aeropostale? Maybe. If you shop at Target, are you going to shop at Redbox? Maybe not. Some of their targeting model makes sense, but without more merchants, they fail to deliver offers in context. The other great addition would be aggregated offers, meaning taking PFM data (read: credit card purchases) to provide FI Cardlytics clients the ability to provide discounts on non-bank purchases. Why not? We have the data. At least encourage debit card behavior at the primary FI by dipping into this feed and properly offering all relevant rewards. So we have some work to do to get 1-2 offers per customer per month. But again, I like the trend.
One other concern I would have is accessibility of the average FI to the Cardlytics platform. Are core providers like Fiserv, FIS, and online banking providers like Intuit (which offers Cardlytics through Purchase Rewards to hundreds of FIs) taking a cut of that $1-2 a month per user? Our industry has some phone calls to make I think. Check the contracts.
Congratulations to Cardlytics on their ongoing success and win at Finovate. They have a great team, and the Bank of America partnership demonstrates that (and the bank’s need for additional income streams).
We all need a bit of that.