Daily Tearsheet: Paycheck strategy and employee retention, banks are engaging in the climate conversation, and how BaaS unlocks opportunities
- On Tearsheet today, banks are slowly but surely engaging in conversations about carbon exposure in their lending portfolios.
- Also, the connection between paycheck frequency and retention.
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The Net Zero transition: Banks are starting to engage in the climate conversation
Climate change is creating a global imperative for systematic change. If we are to meet the goals in the Paris accord and reduce global emissions by 7.6% every year by 2030, every industry must be engaged in taking action.
To put this challenge into perspective, the constraints the world experienced during the pandemic caused carbon dioxide emissions to fall by 5.4% in 2020. But despite the reduced activity in many sectors of the economy, they returned to near-pre-pandemic levels by the latter part of the year, according to NASA.
This means that all those changes we experienced during the pandemic were still not enough. So what’s it going to take?
Banking as a Service unlocks opportunities for brands, bigtechs, fintechs, and banks
By Angus Ross, Chief Revenue Officer, BaaS, Finastra
What is Banking as a Service? BaaS is the provision of retail or wholesale banking products and services, in context, as a service using an existing licensed institution’s secure, regulated infrastructure with modern API-driven platforms.
Finastra’s latest research, Banking as a Service: Outlook 2022 | Paving the way for Embedded Finance, provides insight into the market maturity of BaaS solutions. According to which, 85% of senior executives are already implementing BaaS solutions, or planning to within the next 12-18 months.
As we look to the immediate future, one thing is very clear: consumers -- both retail and corporate -- are changing where they source financial services and shifting to non-bank channels. BaaS is paving the route towards truly embedded finance and a banking experience that adapts to this changed consumer behavior.
Read more (sponsored by Finastra)
The latest briefing
Payments Briefing: How a company’s payment acceptance methods affect its customer retention
In the subscription economy, a company’s payment acceptance strategy plays a key role in its ability to improve customer retention, according to a new report by payments firm GoCardless and subscription management platform Zuora.
Issues related to payment methods are the primary cause of involuntary churn. Credit card payments, in particular, are prone to failure for a variety of reasons.
Companies that accept more payment methods grow their revenues faster, too. Those that accept five or more payment methods saw revenues rise on average 4% faster than those that had less than four payment methods.
When businesses select a payment acceptance method, they typically look at factors like cost, customer demand, and market coverage. However, it might also be beneficial for them to look at how different payment methods impact customer retention.
Read more (exclusive to Outlier members)
Just look at the charts
1. How major brands can use banking for competitive advantage
Source: Oliver Wyman
2. BNPL continues to disrupt the payments landscape
The first Filipino American neobank kicks off
Filipino-led fintech BayaniPay, partnered with Pasadena, East West Bank to launch the first-ever Filipino American neobank to cater to the financial needs of Filipino Americans (BusinessMirror)
How small banks can respond to overdrafts
The overdraft revolution — begun by fintechs offering no-fee banking accounts — is now in full swing as one big bank after another eliminates or sharply cuts fees for overdrafts and NSFs (The Financial Brand)
Can the cryptosphere fix the atmosphere?
A budding movement within the crypto industry says it can keep carbon out of the atmosphere by locking it on a blockchain (CoinDesk)
FDIC seeks input on bank mergers
The FDIC is soliciting comments regarding the application of the practices, rules, and regulations that apply to mergers involving one or more insured depository institutions, or a noninsured institution (FDIC)
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