The race to offer deposit, savings, or “cash” accounts adjunct to existing financial services solutions and nonbank brands continues at full swing, with Credit Karma announcing a high-yield savings account feature on October 3, 2019. On the same day, Samsung—in partnership with Netspend—announced Samsung Pay Cash, an addition to the Samsung Pay digital wallet that allows users to store cash and conduct transactions anywhere Mastercard is accepted, all through the existing Samsung Pay environment. Uber then closed the busy month with its announcement of Uber Money.
More and more organizations see value in adding savings or deposit account features to their existing suite of financial (and increasingly nonfinancial) products. As telecom, technology, retail, loyalty, and financial wellness companies, along with many others, continue to explore whether brand banking makes sense, here are some high-level questions to consider as your organization contemplates steering into the racetrack:
- Will your organization develop a savings or deposit account feature that targets a specific underserved demographic that is not targeted by similar products?
- Will the feature be stand-alone, or will there be technical integration requirements, whether with an existing account/card processor or through in-house capabilities?
- Does your organization have the technology capabilities and personnel to offer adjunct deposit features, or does your organization have a plan to either hire and build or outsource?
- Will your organization identify a partner bank(s) to hold deposits, or will your organization pursue an independent bank charter?
- Will your organization store potentially sensitive account holder information?
- Will you offer specific benefits or rewards to drive customer engagement, including loyalty points, interest, promotional offers, and exclusivity?
- Will your organization contemplate payment mechanisms, including physical cards, near-field communication, QR codes, and wearables?
- Is your organization including the feature to drive profit or to further customer engagement?
- Will you develop a financial model, with realistic or conservative estimates?
- Will you have a project plan that organizes all points of the product feature from infancy to post-launch? Will your project plan include a qualified project manager, whether internal or external?
- Will your timeline for launch be realistic, including enough time to receive appropriate regulatory approvals, technology and infrastructure development, and third-party contract negotiations?
- Will you loop in your counsel and regulatory compliance teams as appropriate to ensure a smooth launch?
Adjunct savings and deposit account features have proven to be an innovative and increasingly visible way for organizations to engage their customers and build an ecosystem of financial services. Leveraging the power of existing, recognizable brands especially resonates in the marketplace, as consumers often engage best with the brands they love.
Developing a game plan upfront better equips you and your organization for the race, whether you jumped on the racetrack years ago or are still building your engine.