Banking Briefing: Offering personalized banking in an inflationary environment
- As the financial situation takes on darker hues for consumers, personalization takes on a whole new dimension.
- Here's what one neobank is doing to offer personalized services when times are tough.
The financial situation seems to be challenging digital banks to rethink their personalization tactics – going past mere free ATM networks and cashback offers.
Put another way, neobanks have become experts in offering consumers t-shirts in their favorite colors. But in times of strong winds and ever-graying clouds, can they offer coats as well?
Through its partnership with SpringFour, Mission Lane, a digital bank focused on consumers who struggle with building credit, aims to solve this very challenge.
About the partnership
In late May, Mission Lane partnered with SpringFour, a social impact fintech that helps cardholders connect with financial health resources.
SpringFour currently connects over 20,000 government and nonprofit financial assistance resources. In 2021, it delivered over 3.1 million financial assistance resources. Today, the fintech has partnerships with major financial institutions including Capital One and M&T Bank.
The partnership means that Mission Lane’s agents have access to SpringFour's platform, and in this way can connect their customers to financial health resources. The type of resources consumers are connected to depends on their current financial needs. There are around 30 different financial health saving and spending categories, like underemployment, food costs, and prescription drug costs.
In addition, consumers get access to SpringFour's digital resource, where they can seek out answers on their own.
“It's extremely important to provide consumers with an opportunity to look for these resources on their own, because unfortunately a lot of people do feel shame, and there's a stigma attached to not being able to pay your bills,” said SpringFour’s co-founder and CEO, Rochelle Gorey. “So this offers them an opportunity to get that information themselves. It's also co-branded with Mission Lane and SpringFour together, so they feel that assistance is coming from their lender, as well."
The why behind the what
When times are tough, people need to know there’s a human side to their lender, said Shane Holdaway, CEO of Mission Lane. The neobank has always put an effort into emphasizing a human side in its business model and brand image, he said. But this partnership helps add a new layer to that goal.
“SpringFour helps us on two levels,” said Holdaway. “It helps us with the direct customer interaction, with thousands of government nonprofit resources that have been fully vetted and can help individual customers. But it also helps with that broader mindset, philosophy, and culture that helps reinforce that."
Behind Bank of America's SMB offering
In the last briefing, I dived into Citi’s new move to improve gig economy workers’ banking experience, and made a light allusion to Bank of America’s digital resource center for small businesses.
Now, I’m flipping the script – making a light reference to Citi’s new decision surrounding P2P payments, and adding a tad more details to Bank of America’s digital resource center for small businesses.
So what’s in Bank of America’s Start a Business Center? It’s essentially an online resource that helps SMB owners connect with how-to resources and the bank’s own small business experts.
There are three tabs the user can flip through, including ‘learn and plan’, ‘form your business’, and ‘set up banking’. Each section of the site offers articles that guide the user through small business-specific challenges.
Rob Pascal, chief experience officer, business at Bank of America, answers a couple of questions on the new offering:
What has been the response to the new offering so far?
Engagement with our Start a Business Center has exceeded our expectations. The center is open to everyone, and since launching in March, over 12,000 business owners and aspiring entrepreneurs have accessed the site, contributing to a growing number of new small businesses that are being set up for success with the help of Bank of America.
What's next in your plans for SMB banking?
Bank of America provides clients with the latest innovations and high-tech, high-touch digital banking solutions that integrate seamlessly with their business’ operations. Over the past two years, we’ve seen many of our small business clients adopt new digital tools, including digital project and team management tools, and accepting new forms of cashless payments. These entrepreneurs have modified their operations to serve a digital-first customer who expects easy access to information, goods and services right at their fingertips, which has only been amplified by the pandemic.
Our recent 2022 Small Business Owner Report found entrepreneurs believe that new and emerging technologies like cybersecurity solutions, 5G, and automation will be increasingly important for business success over the coming decade. As these business owners continue transitioning to a digital-first world, 44% plan to prioritize digital sales over their brick-and-mortar operations. We are proud to offer solutions in the evolving small business landscape, and are confident our digital solutions will provide our small business clients with the modern technologies and capabilities their customers expect, while further improving their overall business operations.
What we're reading
Banks still aren't mastering the moves to the robo
The banking sector is behind all other sectors in AI adoption (The Financial Brand)
Some neo hope
How neobanks like SoFi and Qapital have managed to reshape their business models and hold their ground, despite exceptionally obstacle-y obstacles (American Banker)
‘All our customers matter’ and other fairy tales
Lloyd's branch closure could leave elderly and vulnerable consumers in a precarious situation (BBC)
Can't always bank on banking
After getting into regulatory trouble with the CFPB and being ordered to stop lending, LendUp seems to be calling it quits on its banking initiatives, liquidating its assets, including its neobank. (Protocol)