The recent CFSI show in New Orleans was wonderful; focusing on innovation and serving the global underbanked population. For instance, SAFARICOM presented its achievements in Kenya where they have great success with their M-PESA mobile payments network. This network allows formerly unbanked consumers, 15-million users, to store funds and pay individuals or retailers via their mobile phones.
Retail Financial Trends in the US
In the United States, there is a growing trend to provide a broad range of financial services (e.g. check cashing, remittance, bill payment, prepaid cards, etc.), in mainstream retail. Walmart® has led this trend and has achieved great success with its “Money Centers”. This year, Walmart expects to cash somewhere in the area of $40 billion in checks. Jane Thompson, Walmart’s outgoing President of Financial Services, was the keynote speaker at CFSI and urged the industry to continue innovating and serving this market as Walmart has clearly done.
Other mainstream retailers like Sears® and Safeway are also recognizing the value in tailoring programs for this same demographic base. These retailers are making strides to update their store’s financial service offerings making them more visually appealing to the customers. In addition, they are investing in systems to enhance the transactional experience.
At AllTrust Networks we’ve been preaching these same messages for several years and believe that there are two technology-driven keys to success for alternative financial service providers.
- The first is employing technology that enables offering services to as many consumers as possible. For our users, to effectively manage risk, this means focusing on true consumer identities through biometric identification rather than asking for SSN’s. Requiring an SSN is unattractive for many potential consumers, and using a biometric ID means faster repeat transactions which are critical in retail.
- The second key is having a platform capable of combining all of the financial service offerings to allow for faster transactions, better compliance programs and more efficient operations within the retail setting.
For the underbanked consumer, this trend in retail financial services should deliver them better choices, new products and low prices. Many national retailers have already followed Walmart’s lead; and we’re seeing a great rush to deliver the whole set of financial services in an attractive setting that drives repeat visits, and leads to a consumer relationship that extends beyond just financial services. In many cases, the alternate financial services may be offered as a loss leader or breakeven proposition to bring more customers into the stores and drive more retail sales. Mainstream retailers are smart to focus on these areas as this part of the population is expected to continue to grow, through immigration as well as continued increases in consumer banking fees.
Tell us what you think about this trend in retail financial services, in the comments. For more on AllTrust’s new all-in-one platform, Retail Connect, contact us at 1-866-324-6729 or pcssales (at) alltrustnetworks.com.
