Amex launching digital receipts further confirms why receipts are crucial for FIs
Image credit: Sensibill
Customers want more transparency and insight into their purchases and spend than banks are giving them—something Amex is cashing in on alongside big tech
Amex recently announced its launch of Digital Receipts in a bid to give its customers more insight into their purchases and card statements. The launch signals Amex’s goal of helping customers better understand and confirm their spend—with high-level data like merchant name, order number, items purchased, and cost.
This isn’t the first time in recent months that larger, consistently more digital-focused companies like Amex have stepped into the receipts and fintech game.
In late 2020, Amazon announced its Amazon Shopper Panel, a program that pays consumers for uploading their receipts for non-Amazon purchases. Around the same time, Google relaunched Google Pay to become an all-encompassing financial app—including the ability for users to upload and interact with receipts, where the Google Pay app will crawl Gmail and Google Photos for receipts.
For financial institutions, this may seem a bit overwhelming; with big tech like Google and Square coming for your customers’ data and moving into digital receipt solutions, how could you ever hope to keep up?
Your FI already has the data—now, you need to do something with it
Financial institutions are currently sitting on massive piles of data and often struggle to find ways to make it actionable and meaningful for their customers. Big tech may be more digitally savvy and millennial-friendly, but they don’t have the wealth of customer data that you do. Amex may be able to share the higher-level data from receipts and purchases, but that doesn’t tell the whole story for your customers.
Transaction data gathered from purchases can tell you limited information such as the merchant and the total purchase amount. While this information is a start, institutions need to dig deeper, leveraging alternate data to help them better know and understand their customers.
Partnering with an SKU-level data expert can reveal key insights from receipts such as the items & SKUs, taxes and tips, off-card spend, and return & warranty information. Such details can provide a better understanding of brand loyalties, life stage events, behavioral data, and psychographics, providing a more holistic view of customers and their timely financial needs.
Big tech has a strong relationship with millennials—do you?
For example, let’s say two customers recently spent $100 at Walmart, and both customers bank with the same FI. Traditionally, their bank would offer these customers the same or similar financial products, because the data they have access to doesn’t go deep enough to suggest that both customers are unique.
But what if the bank could extract data from both customers’ purchases, right down to the SKU-level, that showed one customer is a new father who recently purchased a new home with his partner? Or, that the other customer is a new grad student who travels for her thesis program and regularly purchases travel accessories?
One customer could benefit from a line of credit and robust savings account for a child’s future college fund, while the other could probably use a points-based credit card or cashback rewards card for all of her travel purchases.
It helps that you already have this type of data, thanks to long-standing customers that have been banking with you for years (and using your digital tools to do so).
You have the power to personalize—quickly and at scale
Customers don’t want just any product, and they definitely don’t want irrelevant financial advice or solutions that don’t serve them.
Instead, they seek solutions that cater to their specific needs, helping them achieve their own version of financial wellness. For FIs, this means providing access to products and services that meet your customers’ needs right now, where they are at this stage, and where they’re headed.
By using your customers’ everyday spend data to understand them on a deeper level, you can provide the most relevant, highly targeted, and financial wellness-focused insights to them—doing this at scale based on spend insights and segmentation.
“SKU-level data derived from receipts reveals rich information, including merchant, items purchased, date and location, and form of payment. These details can reveal major life-stage events, values and lifestyles, and payment-preference patterns. Such information can indicate if a customer is starting a business and needs a business account, if they’re going to college and need a student loan, or if they’re starting a family and might need a 529 account. With this level of insight, banks can deliver more personal, timely service that better secures their relevance in customers’ lives. Insights gleaned from alternative data can even help customers maximize savings and make each dollar go farther.” — Corey Gross, CEO and Co-founder, Sensibill
Receipts incentivize your customers to engage with your digital tools
71% of younger customers would use completely digital banking services. Add to that the growing number of customers turning to digital banking tools, and you’ve got the perfect recipe for driving engagement with your FI’s own tools.
When you consider that 63% of customers feel sharing data with their bank should result in more personalized products, services, and advice, receipts offer a convenient way for you to gather the data needed to deliver on those demands.
When customers use your digital tools for their everyday banking needs, like uploading receipts and tracking purchases, they share valuable data and insights from their everyday spend that you can use to drive more adoption of and engagement with your digital banking solutions.
The result? More engaged customers that turn to your digital banking tools for everyday transactions, spend management, spend insights, and financial advice.
Follow the leaders or be at risk of playing catch up
Amex’s move into digital receipts, along with big tech’s foray into financial management, is actually a good thing for your institution. Here’s why:
As an FI, you already have a foundation of trust built with your customers—they know you, like you, stick with you, and you already have them in your ecosystem
Unlike big tech, your institution has established customer relationships you’ve had for decades, and those relationships give customers the impetus to share their data with you
You’re already practicing some level of personalization
The key to ensuring big tech doesn’t outpace you? Using digital receipts and everyday spend data to understand your customers on a deeper level, with a human-centric approach.
