Banks are welcoming more partnerships with financial technology companies — adding services in an effort to reinvigorate faith in banks amid the ongoing backlash against new fees.
During the end of 2011, banks succumbed to consumer protests after Bank of America® drew attention to industry-wide plans to charge debit card fees. Aware of the public backlash, Bank of America® and other major banks have rescinded plans to introduce this fee.
As 2012 begins, U.S. banks may be trying to turn a new page. Many of them are tapping financial technology companies to improve their current products — and the new upgrades cost nothing to customers.
Bank of America® unveiled its merchant-funded rewards program, called BankAmeriDeals, that offers customer discounts at participating retailers. After activating an offer online, customers simply use a credit card or debit card to redeem it. The program is powered by Cardlytics, a company that provides loyalty solutions to financial institutions.
Compared to the now-defunct debit card fee, BankAmeriDeals is a 180-degree turn.
Capital One has introduced an educational tool called Journey Credit Tracker for Journey® Student Rewards credit card customers. The tool allows these customers to access a TransUnion credit score on monthly basis while also teaching them about credit.
Journey Credit Tracker is powered by Credit Karma, a company that offers credit management services at no cost. With a Credit Karma account, users can access their TransRisk score — not necessarily a credit score used by lenders — and track their credit with a credit monitoring plan.
SmartyPig, the online piggy bank partnered with BBVA Compass, is in talks with several undisclosed U.S. financial institutions to offer its GoalSaver product.
GoalSaver is a platform that uses the same methodology as SmartyPig. Customers are able to set savings goals and invite friends and family to contribute to those goals through popular social networks including Twitter and Facebook.
The adoption of GoalSaver by other banks will expand the idea of “social saving” — SmartyPig’s crowned feature.
Is It All Flash?
Although new additions to bank products serve to deliver a more comprehensive banking experience, it all comes back to cost.
In a 2010 poll by MyBankTracker.com, nearly two-thirds of respondents preferred a free checking account over interest checking (25 percent of respondents) and rewards checking (7 percent of respondents).
Given the option between a less-costly bank account or a feature-heavy bank account, consumers may prefer the former.