Major Retailers Competing with FIs for Customers’ Banking Business

by. Jeff Falk

Have you heard? Your customers can now withdraw cash from their Walmart prepaid card at any ATM, take out loans for home renovations from the Home Depot, apply for mortgages from Costco or small-business loans from Sam’s Club. And rumor has it, Walmart is testing the viability of life insurance policiesas an extension of their business lines.

It’s true — financial institutions’ (FIs) biggest competitors in the future may very well be major retailers where customers can also get consumer products like food, cleaning supplies, clothing and electronics. It’s created a whole new playing field.

Although the “socks and stocks” strategy didn’t work for retail-giant Sears, the financial industry has gone through major upheaval in the last five years. Customers have become disillusioned with big banks’ money-making strategies, and FIs and merchants are still working through how to comply with all the regulatory changes from the Durbin Amendment and the Consumer Financial Protection Bureau. In the end, all these changes have a big impact on customers. And as we realized on Bank Transfer Day, many are fed up.

We’ll keep an eye on this trend and report back with updates. In the meantime, please share with us some of your FI’s best practices for attracting and retaining loyal customers. These will be key to helping the entire financial industry attract, nurture and retain loyal customers.

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