Consumer financial institutions can increase customer loyalty and sales by offering subscription perks like bundled streaming video applications and food delivery, according to a new report released Tuesday.
The report, from tech developer Bango, found nearly one-third of Americans are willing to switch their bank or other financial provider for free access to their favorite subscription services, with video streaming perks near the top of the list.
Bango’s “Banking on Loyalty” report found 31 percent of U.S. consumers would change providers for free subscriptions, while 32 percent would switch specifically for free streaming services.
The appeal is strongest among younger consumers: 50 percent of Millennials and 48 percent of Gen Z said they would switch for access to their favorite subscriptions.
Banks remain a relatively small part of the indirect subscription market: Among Americans who receive subscriptions through another company, 9 percent get them through a bank, compared with 35 percent through a mobile provider, 34 percent through a retailer and 25 percent through a cable provider.
While broadband and premium video companies are largely seen as the most-reasonable service provider to offer a subscription to consumers, Bango takes the position that other companies, including financial institutions, should consider their own bundled subscription offerings, especially if they regularly interact with customers.
Expectations are growing that non-telecom service providers will eventually offer subscription products and bundles in the future: More than one-quarter of consumers surveyed by Bango said they believe subscription services will be included in a financial-services perk, with that figure trending higher among younger consumers in the Millennial and Gen Z demographic.
Thirty-nine percent of Americans said they would be more loyal to a bank that helped them save money on subscriptions, including 54 percent of Millennials. Another 36 percent want a single sign-in and monthly bill covering all their subscription services.
Bango argues banks could move beyond one-time credits or vouchers by giving customers tools to activate, manage and upgrade subscriptions directly through banking apps.
“Consumers already get subscriptions through cell phone providers, retailers, and other companies they use every day,” Paul Larbey, the CEO of Bango, said in a statement. “Banks are not being asked to create a new consumer behavior — they are playing catch-up with one that is already established elsewhere.”
Bango has some business interest in this space: The company’s core product is the Digital Vending Machine, a technology platform that allows companies with any type of financial transaction to launch their own subscription marketplace linking their billing to third-party services like streaming video applications, food delivery, security and other products.
Bango is best known for partnering with broadband providers and cable TV services like Verizon to support their subscription offerings, with Verizon using the Digital Vending Machine for its Plus-Play streaming marketplace. Other companies, like Comcast, Charter and Optimum, have also leaned into Bango’s Digital Vending Machine to power their subscription sales, billing and management offerings over the years.
But broadband and pay TV providers are not the only ones who can offer those types of subscriptions to their customers. Banks regularly charge customers fees for engaging in certain transactions — and there are plenty of opportunities for financial institutions to increase customer loyalty and revenue without inviting complaints over onerous charges.
For instance, a bank that regularly markets to small businesses could use Bango’s Digital Vending Machine to bundle LinkedIn Premium and the online security service NordPass at a discount for customers who have certain deposit or investment accounts — or even offer that bundle for free if business customers opt for a higher banking tier.
Banks that deal with consumer deposit accounts could offer an extended free trial of a delivery service like Uber One, then allow customers to convert that subscription into a low-cost bundle paired with a streaming service like Netflix or a premium music application like Apple Music. All three subscription services are available through the Digital Vending Machine.
These bundled opportunities are likely to resonate more with younger consumers, based on Bango’s own surveys, which could allow financial institutions to reach a growing segment of the population that has been traditionally harder to market to.
“For Gen Z, subscription benefits are already influencing how they choose and judge their financial providers,” Larbey said. “A voucher or cash-back offer may get attention, but it often sends the customer elsewhere once redeemed. The bank pays for the benefit while another provider owns the ongoing relationship.”
By comparison, a subscription to a streaming video, music or delivery service — or all three — keeps customers hooked into a company by allowing them to easily pay for and manage their subscriptions via the same relationship they already have with a bank.
“Banks already sit close to customers and their money; those that make subscriptions easier to access, manage, and upgrade can turn a one-time perk into repeating loyalty — something customers use month after month, making their accounts more useful and building stronger engagement and recurring revenue,” Larbey said. “But that role will not be theirs by default. If banks do not build the relationship, someone else will.”
The full report from Bango is available to view by clicking or tapping here (free registration required).
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