How MSU Federal Credit Union uses shopping incentives to get customers to engage beyond just checking their balances

Welcome to another episode of The Tearsheet Podcast, where we explore financial services together with an eye on technology, innovation, emerging models, and changing expectations. I’m Tearsheet’s editor in chief, Zack Miller

Banks and other FIs continue to look for higher engagement with their customers. Logging into an account and refreshing a balance doesn’t create relationships. So, what’s an FI to do to drive real engagement. Michigan State University Federal Credit Union has rolled out a loyalty program that delivers gift cards directly to customers inside their accounts by merchants trying to acquire new customers. The program uses customer data to target offers that matter. And this is just the beginning as banks and credit unions find ways to extend their value proposition, building and strengthening relationships with their customers.

I’m joined by Ben Maxim, Chief Innovation Officer at Michigan State University Federal Credit Union, and Brendan Grove, CTO of Prizeout, who are to share their insights on how financial institutions are looking to provide more value to their customers, extended beyond that tried and true toaster.

We’ll discuss the power of partnerships between credit unions and fintech companies, and explore topics like the evolution of loyalty solutions, the challenges of integrating new technologies into existing credit union infrastructures, and the exciting possibilities for enhancing member engagement through personalized data-driven experiences.

So, whether you’re a bank or credit union product person, a fintech aficionado, or just curious about the future of banking, you’re in for a treat. Let’s get started! 6 big ideas

1. Importance of Personalization and Engagement: Ben highlights the significance of enhancing digital engagement and bringing forward personalization in the credit union industry. He says, “How do we engage with our members and have them interact with us more as a brand, versus, you know, their bank or credit union?”
2. Shift towards Partnership Model: Ben discusses the shift from attempting to build everything in-house to adopting a partnership model with fintech companies. He explains, “We started investing some fintechs… if we can find a partner that’s strong and kind of mission-aligned with us, we’ll start there every time now.”
3. Role of Data in Personalization: Brendan emphasizes the importance of usable data in driving personalization efforts. He says, “The best data is usable data… So we invested first pretty heavily in our data engineering team in the data foundation there.”
4. Gamification of Banking Experience: Both Ben and Brendan discuss the gamification of banking experiences to enhance member engagement. Ben highlights, “How do we take this gamified earning experience and make it better… to take back shopping?”
5. Impact on Revenue and Interchange: Ben discusses the potential revenue impact of loyalty solutions and their role in replacing traditional interchange revenue. He mentions, “As society, we’re going to move away from card-based revenue… So what are the ways that we can capture payment methods?”
6. Future Evolution and Growth: Brendan and Ben touch upon the future evolution of loyalty solutions and their potential for further growth. Brendan expresses, “How do we make this just one of the most engaging rewards platforms… and to continue to watch that cash back grow.”

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