By Roy Urrico
Could credit unions better compete with traditional and non-traditional banking rivals by offering incentives? Solana Beach, Calif.-based Wildfire Systems, which enables financial institutions to embed rewards and cashback offerings within existing services, believes its technology could be a differentiator.
“Credit unions surrounded by traditional bank rivals cannot afford to lose members to the growing ranks of virtual competitors. Retention is becoming imperative, making rewards that sweeten the deal for credit union members more popular — and more crucial — than ever,” said Jordan Glazier CEO of Wildfire Systems, which delivers a loyalty and rewards program in a turnkey white-label platform.
Glazier pointed to FI Works statistics that reveal financial institutions typically lose 15% of its customers to attrition each year, and each new customer generates only $150 in profit annually. but takes $200 to acquire and onboard. In other words, credit unions cannot afford to lose members.
Challenging the Status Quo
Conventional financial institutions no longer present the only competition for credit unions. Much of the challenge comes from fintechs using digital technology that enables ordinary banking chores like depositing checks, moving money and paying bills.
“Consumers may find the diversity of today’s banking options overwhelming, as the digital shift means that choice is no longer limited by proximity,” said Glazier. He cited digital-first fintechs, for example, that have no physical presence at all but can attract customers from around the globe.
Glazier pointed out with banking as a service (BaaS) platforms and other new financial technology, banking is not strictly a vertical service anymore. Digital banks and fintechs can now distribute conventional banking services horizontally — and to distinctive groups.
Neobanks, also called “challenger banks” or online-only banks, offer apps, software and other technologies to streamline mobile and online banking. Some focus on diverse groups such as musicians, climate/green tech followers, Black/Latino/Asian/Muslim communities, kids and teens, and LGBTQ+ groups.
Glazier indicated these challengers are able to spin up quickly by tapping into BaaS platforms and offering consumers typical banking products and services such as competitive loan rates, checking and savings accounts, payment and money transfer services, and financial education tools.
Glazier suggested credit unions and other traditional financial institutions need to start exhibiting the same type of agility and bring new features and benefits to users as quickly as these new banking competitors.
Looking for Rewards
Rewards have also become a big part of financial services. Capital One, for example, constantly hypes its rewards program, and last year PayPal acquired Honey Science Corp. with its suite of money-saving tools, including rebates and a rewards program.
“The newcomers think in days and weeks; traditional financial institutions think in quarters and years,” said Glazier. “The neobanks, they are more like tech companies and marketing entities that are rapidly evolving. They are able to take advantage of platforms and integrate services like Wildfire really quickly to have a competitive advantage.”
Glazier held that credit unions could implement a white label version of Wildfire’s loyalty and rewards platform in a matter of weeks (“Seven days is our record.”) using application programming interfaces (APIs) and software development kits (SDKs). The flexible technology enables credit unions to integrate the platform within new or existing applications and point programs.
Wildfire provides an enterprise platform through browser extensions that enables financial institutions to embed social commerce, rewards, and cashback offerings within its existing digital and mobile services. Wildfire also connects with more than 30,000 retail merchants to these partner programs.
“When a member visits retailers such as Macy's or Overstock.com, or any of thousands of stores, the member sees coupons and cash back offerings brought to (the consumer) by their credit union or bank,” noted Glazier. “It's a turnkey platform through APIs and white label offerings that enable financial institutions to have superior offerings.”
Starting a New Wildfire Feature
Wildfire Systems recently announced its new Couponator feature that enables financial institutions, retail brands and technology original equipment manufacturers (OEMs) to deliver what the company calls a more seamless customer experience to online shoppers.
Wildfire’s new feature automatically finds and applies the best coupon at checkout as a feature in its turnkey white-label loyalty platform while consumers shop online.
“Enabling shoppers to find the best deals and auto-apply them with the Couponator is a major addition to our white-label rewards platform that will drive more revenue for our partners and facilitate positive brand association for their consumers, who will benefit by automatically saving money with their favorite online stores,” said Glazier.
Glazier also pointed out that coupons and discounts, as cited by the market and consumer data firm Statista, is the second leading reason why people buy specific products online, after free shipping. “As a result, customers who find it easy to find and apply coupons without wasting time trying codes that do not work, will benefit from this new feature, and our partners will be able to provide an improved customer shopping experience, increasing loyalty and brand affinity.”