A Digital Commerce report by report by Gartner also forecasts that by 2023“75% of organizations selling direct to consumers will offer subscription services.”
It is an undeniable fact that subscription services are on the rise. Due to the pandemic, the world has been stuck at home and has been spending money on digital products and services that make dealing with this new normal a tad bit easier. From cars to music, TV to food, there is hardly anything of daily use that can’t have an aspect of subscription-based billing anymore.
For anyone in the Financial Services Industry (FSI) or FinTech wondering how the post-pandemic growth will be fuelled, the answer is “The Subscription Model.” This represents a shift in the business model, where customers will choose to pay for their financial services or products in a weekly, monthly, yearly, or usage-based manner.
Unlike one-off transactions, subscription models are known to have stronger lifetime customer value. They provide more recurring revenue, making it more predictable, and equip businesses with rich customer data and analytics. This enables them to target offerings and embrace the ever-changing consumer preferences. For the financial services sector, a shift to subscription-based billing can translate to a reduction in customer churn, newer revenue streams, and more upselling.
Consumers seek ways to manage their spending in bundles and transact with whoever creates the easiest experience for them. Financial institutions must focus on providing not just these bundles but also exceptional customer convenience. Here’s how the FSI can use the power of data and technology to transform their business for the post-pandemic world –
Meet Customers Where They Are – Focus On Convenience
The digitally savvy consumer no longer responds to mass marketing or irrelevant spam. They want timely and consistent engagement at their fingertips, making it a personalized and consumer-centric experience.
Use data and machine learning to offer tailored customer service that makes banking friction-free and makes the customer feel cared for. Map happenings and trends with customer activity and proactively recommend services such as loans, insurances, investment, and saving options that they may not even realize they qualify for.
Know Who The Customer Is – Become Relevant
Bring back the time when one used to know the name of their local branch manager, create an authentically personalized experience. An intelligent recurring billing management software can help you get targeted insights into how customers navigate through their subscriptions. Deploy that to craft customized and unique communication.
For example, credit card spending can be analyzed to understand the cardholder’s spend categories, enabling the FSI to send out highly targeted rewards or offers. The more personalized the outreach, the better the pull factor of it will be.
Provide An Unmatched Experience – Deliver Intuitively
Go beyond the traditional marketing and communication tactics. Understand consumer behavior by consolidating all data and building predictive customer profiles. This will enable you to know the customers and provide advice that fits well with their financial future.
With subscription-based advisory and AI bots, financial service providers can add significant benefits by recommending the next best steps rather than just mass-market selling of products or services.
These are just a few examples of the Financial Services Industry and FinTech’s benefits with the proper capture of data and smart deployment of recurring services. But now is the time to move on and become the market leader in delivering unbeatable experiences.
Since the FSI remains largely unchanged through the last few decades, the shift to any new business model is bound to be slow. The great thing is that with the right partner to manage the subscription billing system, the shift can be easy and iterative. By deploying across new acquisition channels and revenue streams and then rejigging existing ones, financial services can deliver curated, accessible, and adaptable banking solutions across the board to all customers with ease.