Banks can turn the payout flows of their commercial clients into a customer acquisition channel by creating a co-branded receiver account. These accounts are issued by the bank, wrapped in the commercial client’s brand and offered to the payout recipient as the fastest way to get their money, according to the report.
For recipients, a co-branded receiver account offers a solution from someone they trust—the sender—and a way to get their money fast. For senders, it offers a way to deepen their relationship with the recipient.
For banks, co-branded receiver accounts are a way to acquire customers with the help of the sender’s brand, retain the deposit and card spend, and offer a full ecosystem of savings, credit and lending products to go along with the account.
Without this offering, banks lose the opportunity to turn payout recipients into customers.
“A regional bank running $4 billion in annual disbursement volume is operating a $4-billion-a-year outbound pipeline to its competitors, a pipeline that, in many cases, isn’t even fast,” the report said. “Every payout is a deposit walking out, a customer the bank will never acquire, and an instant payout moment the bank could have owned.”
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Banks adopting this strategy should first focus on category of recipients for whom the payout is income, and therefore urgently needed, and who are paid repeatedly. These recipients are most likely to readily accept a new account that will allow them to get their money faster. They are also the ones who will have the highest lifetime value, according to the report.
The report suggests that banks offer the account at the moment of payout; use the sender’s brand as the bridge to recipient trust; make the account the default in the destination-selection step; make the account useful beyond the payout; and then build the ecosystem on top.
“The first account is the door,” the report said. “Once the recipient is a customer, the bank has a funded relationship, a known earning profile, transaction history and a trusted channel, making them an unusually qualified prospect for credit cards, savings, lending and small business products.”
