By Roy Urrico
Finopotamus aims to highlight white papers, surveys and reports that provide a glimpse as to what is taking place and/or impacting credit unions and other organizations in the financial services industry.
Inflation is driving consumers to prioritize the availability of cashback rewards when choosing a new financial institution. In fact, 85% want their financial institutions to offer a cashback rewards program; and 24% would switch for a better cashback rewards program.
That is what San Diego-based Wildfire Systems Inc., a fintech platform that powers reward programs and shopping companions, in conjunction with research firm Big Village (formerly Engine Insights), found in a report, “Online Shopping Rewards Have Gone Mainstream, Offering A Win For Banks, Retailers, And Consumers Alike.”
The white paper assessed the opinions of more than 1,000 adults nationwide, uncovering how economic issues and rising prices have made a major impact on spending habits, driving consumers to seek ways to save money on essentials and everyday purchases made online. The report also revealed the growing importance and popularity of rewards programs along with consumers’ increasing expectations that their financial institutions provide these programs as part of their offerings.
“These findings confirm that most consumers expect to earn rewards when they use their credit or debit card when shopping online, which has huge implications for financial institutions,” said Jordan Glazier, CEO, Wildfire. “Not only do consumers consider cashback rewards a factor in how they choose a bank, but many have switched banks because of the rewards programs offered. Our research underscores the fact that rewards programs are no longer a ‘nice to have’ but have become an essential offering that makes banks and card issuers essential to the daily lives of their customers.”
Key Takeaways
Consumers overwhelmingly want financial institutions to offer cashback rewards programs for online shopping.
· Eighty-five percent want their financial institutions to offer a cashback rewards program.
· Eighty-percent of respondents consider cashback rewards an important feature when choosing a new financial institution or investment account.
· Sixty-three percent expect to earn shopping rewards from their credit cards and 35% from their debit cards.
· Seventy-eight percent prefer cashback as their favored reward type.
Inflation is driving more consumers to look for money-saving tactics when shopping.
· Ninety percent of consumers are more interested in getting discounts, using coupons, and earning cashback rewards when they shop because of rising prices.
· A third of consumers started using cashback rewards programs in the past two years.
· The majority of higher income households also value rewards, with 82% of respondents with a household income over $100K saying they seek them.
· Eighty-one percent are more likely to make a purchase when offered a reward, increasing their use of their credit and debit cards, which benefits their financial institutions.
Many consumers experience confusion with their current rewards program and would prefer a simpler, more seamless rewards experience.
· Consumers do participate in banking rewards programs, with 47% using cashback programs.
· Thirty-eight percent of rewards program participants have never received any rewards.
· Sixty-three percent of respondents who never received a reward indicated some sort of confusion around their rewards program.
· Seventy-nine percent of consumers prefer rewards to be automatically applied as they shop, with just 21% prefer searching from a directory or a list of offers.
· Seventy-percent of consumers prefer cashback deposited directly into a banking account or as a credit on their credit card.
Financial institutions have an opportunity to connect with customers through rewards programs to increase customer satisfaction and long-term retention.
· Seventy-one percent of consumers said they have switched banks at some point in their lives.
· Twenty-four percent of respondents would switch or have switched because another banking institution offered a cashback/rewards program, or it had a better version of a rewards program than their current institution.
· Over half of consumers interact fewer than two times per month with their financial institution using a computer, and 38% of consumers interact with a banking mobile app fewer than twice per month.