How PFM could be a differentiator for card companies

According to a Deloitte study, perks like cash back and discounts are continuing to drive the loyalty of credit card customers.

Zach Aron, author of the study and principal at Deloitte, told Bank Innovation card issuers need to drive loyalty through holistic personal finance tools, as cash back rewards are fast becoming table stakes offerings in the industry.

The study, entitled “Rethinking the credit card business in a customer experience-driven world,” surveyed consumers on how they pay today; how they want to pay moving forward; what value they see in certain payment methods; and what would cause them to change their payment methods.

Deloitte reported that 66% of consumers would be willing to drop their credit cards if an alternative payment method provided the same perks. According to Aron, to drive customer loyalty, credit card companies and banks need to provide insights around consumers’ spending habits and their money management skills.

Deloitte also found banks and credit card companies are best positioned to create “financial app superstores,” or apps where customers can pay third-party vendors from within the app. Seventy-six percent of the respondents said a bank or credit card company was best positioned to make this kind of app, while only 10% said a technology company would be best positioned to do so.

The study surveyed 3,000 U.S. consumers during the summer of 2019. The full report will be released in January. To read our analysis, click here.

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