Offering a great promotion can be an excellent way to drive new business and deposits for your bank. In fact, more and more customers are expecting lucrative offers if they’re going to leave their current institution. And with the rise of digital challenger banks offering ludicrous sign up bonuses with no-fee banking, concocting an enticing promotion is going to be more important for your bank than ever before.
But if these offers are good for your customers it doesn’t necessarily mean they’ll be great for your bank. Sure, there might be an influx of new customers and deposits — at least temporarily. However, it has never been easier to change financial institutions. And customers are getting wise to this fact, hopping from one bank to another and cashing in on the promotional bonuses along the way.
There are of course ways to subvert this. Banks are good at making promotions sticky with compelling bundles, multiple product offerings, and ongoing incentives (all something Zafin can help with, as a matter of fact). But another way is through robust and transparent offer governance, which ensures your clients are playing by the rules, and everyone comes out a winner. Here’s what you need to know:
The Importance of Effective Offer Governance
Ever heard the phrase, “One bad apple ruins the bunch”? It could not be more applicable to banking promotions. While thenet return on a lucrative promotion should translate profitably for the bank (thus allowing future promotions), if clients are taking advantage of the bonus and then bouncing to another institution, it can disincentivize providing such offers.
Worse, some clients are erroneously getting rewarded when they haven’t met the bare minimum requirements to be considered for the promotional offer. With a lot of the tracking at banks still done by hand on spreadsheets, clerical errors are common — which can be nice for the client who gets their bonus but will ultimately impact your bank’s bottom line and could jeopardize similar offers for clients who intend to remain with your institution.
That’s where offer governance really shines. With the right tech, your bank can automatically manage the interactions clients are having with your promotion and sure accurate fulfillment — if in fact they deserve it. No more slipping through the cracks: if they haven’t played by the rules they don’t get rewarded. And if they have an issue with it, your offer governance software can provide a full and transparent report explaining why. And this transparency has benefits from customers participating in good faith too.
Offer Governance Ensures Appropriate Transparency
Worse than someone taking advantage of your promotion in bad faith are customers who have abided by the rules and don’t receive the bonus they’re entitled to. Starting off a banking relationship with an error and a frustrated client is hardly the way to ensure long term loyalty that so many banks are desperate for nowadays.
As a matter of fact, this very thing happened to me and caused quite a headache. I switched to a newish digital-only bank chasing their no-fee banking. And while their promotions and branchless aesthetic led me to believe they had state of the art tech, I experienced an absolute headache when it came to actually receiving the bonus I was entitled to.
It was simple — change my pay cheque direct deposit to their bank from my old institution, ensure at least three deposits, and receive a hundred bucks. Simple. But three deposits came and went, and then four, and I finally called in. After multiple conversations, it was confirmed that, yes, I had qualified, but no, I wasn’t paid and they couldn’t figure out why. Not exactly the best onboarding experience I ever had. Several more phone calls and months passed before I ever got my $100 — and by that point it didn’t seem nearly as enticing as it had once been.
Good offer governance means the bad apples are kept at bay and the good clients are kept satisfied. It really is a win-win for your bank.
If your banks want promotions that bring in the right clients and keep the good ones, you need offer governance. And you need to be able to track promotion eligibility accurately with transparent results. That’s exactly why your bank needs Zafin. Get in touch with us today and find out how we can help.