Zelle’s Value to Banks Beyond P2P

Bank-backed Zelle is valuable to banks for its P2P service and the market data it gathers from working with multiple FIs.

Zelle has dedicated a department to customer listening, Ravi Loganathan, chief data officer at Early Warning Services LLC, the company behind Zelle, told Bank Innovation. 

Through this team, Zelle gathers data on how customers use their P2P apps.

“This is not data on just one specific bank, but the entire banking ecosystem,” Loganathan said. “Each FI looks at its own data to understand what their customer is doing from an experience standpoint, but we are looking at the whole picture and then provide insights to banks. This information allows banks to tweak their payments offerings accordingly.”

The department is crucial to Early Warning as well. Zelle conducts surveys that monitor net promoter scores (NPS), it checks satisfaction scores, and oversees attitudinal surveys.

“The consumer listening part is absolutely critical,” he said. “It is how we understand what the customer wants right now, but also anticipates what they might want in the future.”

The genesis of Zelle’s standalone app comes from this “consumer listening,” Loganathan explained. Through market research, the team realized that plenty of banking customers did not have access to Zelle because their bank or credit union wasn’t on the network.

So, Zelle launched a standalone app that allowed customers whose FIs did not offer Zelle to link their accounts to the standalone app and use the P2P service on its own.

Zelle also gathers data from customer feedback.

“The voice of the consumer is equally critical to Zelle’s offerings because it puts us in the position to provide banks with information on consumer behavior, what they expect and what they want to see more of,” he said.

The customer feedback also ties into Zelle’s marketing and communication efforts, Loganathan said.

“Earlier when you talk about P2P it was always about millennials,” he said. “What we found very quickly on the Zelle side of the house was there were large parts of consumers that did not want the social-media P2P. They wanted a mobile app, but something that kept their finances private and was backed by their banks.”

This is one of the reasons why Zelle has not added any social media component to its services.

As a result of this strategy, Loganathan said that Zelle was able to attract baby boomers and Generation X people. “Actually boomers are the fastest growing population on Zelle,” he said.

Zelle ended 2018 with a record quarter. It reported processing $35 billion in payments on 13 million transactions during the fourth quarter last year. The payment value represents a 61% YOY increase and transaction volume represents an 81% YOY increase. For the year of 2018, Zelle reported $119 billion in payments on 433 million transactions processed compared to $75 billion for 247 million transactions in 2017.

To learn more about payments, Join us for Bank Innovation Ignite 2019 on March 11-12 at the Hyatt Olive 8, Seattle. Early registration ends this Friday, February 1st at midnight. Register here to secure the lowest possible rate!

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