Using Debit and Online Banking Programs as Revenue/Loyalty Generators By Contributor Oct 4, 200908:52 PM ET



By Lynne Laube, Cardlytics



Research shows that more than half of consumers view debit and online banking programs as the most important products and services their bank offers. However, most banks do not invest in them. This can be attributed to the fact that debit cards have thin margins primarily based on interchange, and bill pay and online banking are typically managed as cost centers, generating no profit at all.



However, by leveraging transaction data, banks can turn these products and services into centers that generate profit and increase customer loyalty. This information can be securely utilized in ways that bring meaningful profits and loyalty to institutions’ online servicing and debit programs by enabling merchants to effectively target customers and drive revenue-generating account activity with rich reward offerings.



The rise of debit and the growth of online banking have created new opportunities for the banking industry. Banks can now bring two assets to the retail community. First, retailers can reach banking customers through the bank’s trusted online channel. Second, banks can leverage their unique view into how customers shop to ensure that the right offers from retailers reach the right customers. However, this requires careful strategies specifically targeting at banking.  (Editor's Note:  HomeATM's SLIM would provide the bank with the necessary analytics to create offers that are relevant.  In addition, programs such as Hawkins Strategic Innovative "personalized marketing" platforms can coexist to cross-analyze and create not only relevant offers, but pertinent ones)



A bank is the custodian of its customers’ transactions and has a unique online relationship with its customers. While these are very valuable assets, they also come with equally important obligations for a bank. As banks consider strategies for unlocking the value of their transaction data, they should consider the following:



Own the relationship. Pursue solutions that make your customers understand that you are using your privileged relationship to bring your customers value – not a third party. Customers appreciate that banks know a great deal about them and expect banks to leverage this knowledge.

Keep transaction data in the vault. Solutions that rely on transaction data leaving the bank are fraught with risk. Even if legal, the risk of a security or privacy breach over time is high. Customers expect banks to protect this data and they should.



Use a solution exclusively crafted for banking. (such as replicating the way consumers access cash at an ATM)

Banking plays a unique and special role in the U.S. economy. Be wary of solution providers outside of the banking industry trying to tap into banking’s most valuable assets. If it works for airlines, it probably doesn’t work for banking.



The rise of debit and the growth of online banking have created new assets for banks to tap into during this period of unprecedented industry turmoil. Customers receive great value, and retailers cost effectively reach prospective and current customers. And, banks monetize the value of their transacting consumer relationships, increasing profits and building customer loyalty.



Lynne Laube is president and co-founder of Atlanta-based Cardlytics.