For the past 10 or so years, as FinTechs have come to dominate payments, innovation disintermediation has been the ticket to entry, breaking down individual banking functions and creating financial products with a single purpose. Now it’s getting too crowded for many consumers.
As more consumers turn to super apps and the like to streamline and simplify their financial lives, banking is on the hook as it needs to consolidate more of what has been unbundled in banking.
For the study “Bundled Banking Products: How Credit Cards Secure Customer Loyalty”, a Rising and the PYMNTS collaboration, we surveyed nearly 2,300 US consumers to find out where they stand with having an assortment of card products versus cards filled with single entity features.
See the study: Bundled Banking Products: How Credit Cards Ensure Customer Loyalty
Only 30% of those with more than five credit cards want to keep all their accounts at one bank, while others see the value of consolidation based on the number of cards they carry.
“Younger age groups – Gen Z, Millennials and Gen Y Bridge – are more likely than their older Gen X and Baby Boomer and Senior counterparts to hold three cards or less,” indicates the study. “For example, 58% of bridge millennials have two or three cards and 20% of them have only one. Among baby boomers and seniors, 42% have two to three cards and 22% have only one credit card.
Expense tracking and other digital-focused features are appealing to cardholders, especially among younger demos, but are by no means exclusive to younger cohorts.
According to the study, “the more cards consumers have, the more likely they are to consider bundled banking solutions as a way to improve expense management and tracking. This may reflect the difficulty consumers have in tracking their spending as they get more spending options and open more accounts, and it may help explain why some consumers want help managing their spending. Fifty-two percent of consumers with one credit card say that bundled banking solutions would help them with their spending, as do 54% of consumers with two to three cards and 60% of consumers with four to five cards. »
As for why consumers lean one way or another, loyalty rewards play an important role.
“Consumers express strong interest in credit card rewards programs, regardless of their level of interest in keeping all of their accounts in one FI,” according to the study.
He notes that 33% of consumers who prefer to keep all their accounts with one FI “said they chose their credit cards because of the quality of the rewards programs. Similarly, 40% of consumers with no preference say that their cards’ rewards programs motivated their decision to select them, as did 38% of consumers who prefer to keep their accounts in different FIs. Additionally, consumers’ level of interest in having all their accounts at one financial institution does not appear to affect the extent to which they want a no-fee card.
Get it now: Bundled Banking Products: How Credit Cards Ensure Customer Loyalty