Financial institutions (FIs) need new ways to form sustainable relationships with today’s customers, but these efforts also must support a
profitable business model as the industry shifts to digital capabilities.
Nowhere are these changes more significant than in the economics
of serving the mass market. Competitive changes have eroded traditional
sources of revenue, leading banks to face tough questions on how to serve
these customers profitably.
As part of this digital revolution, the demand for faster payments is
proliferating in the industry among large and small players alike.
In response to these challenging market dynamics, Curinos and Early
Warning recently partnered on a study to identify and evaluate the benefits that Zelle® provides existing and prospective FIs.
This study was completed using data from FIs that have adopted Zelle®.
Early Warning provided aggregated consumer deposit data from Q2 2020 to Q1
2021 that included both key customer characteristics and summary metrics.
The study found FIs that offer Zelle® experience a lift in overall customer engagement. These higher levels of engagement are most significant among low-engagement, new-to-bank and low-balance customers.
The observed gains in customer engagement contributed to additional
profitability and revenue for these institutions, helping to bolster the case
for implementing and supporting additional Zelle® usage among customers. FIs should factor the financial benefits of Zelle® into their investment
planning as they weigh technology and marketing priorities — and other
intangible benefits (see The Intangible Benefits Of Using Zelle® below) — as
they prioritize their investments.
This study didn’t analyze the impact of potential fraud and scams within
peer-to-peer (P2P) payments that have recently received attention. Early
Warning has previously said that “millions of consumers use Zelle® every
day, with more than 99.9% of payments completed without any report of
fraud or scam.”