Executive Summary
Financial institutions (FIs) need new ways to form sustainable relationships with today’s customers, but these efforts also must support a profitable business model as the industry shifts to digital capabilities.
Nowhere are these changes more significant than in the economics of serving the mass market. Competitive changes have eroded traditional sources of revenue, leading banks to face tough questions on how to serve these customers profitably.
As part of this digital revolution, the demand for faster payments is proliferating in the industry among large and small players alike.
In response to these challenging market dynamics, Curinos and Early Warning recently partnered on a study to identify and evaluate the benefits that Zelle® provides existing and prospective FIs.
This study was completed using data from FIs that have adopted Zelle®. Early Warning provided aggregated consumer deposit data from Q2 2020 to Q1 2021 that included both key customer characteristics and summary metrics.
The study found FIs that offer Zelle® experience a lift in overall customer engagement. These higher levels of engagement are most significant among low-engagement, new-to-bank and low-balance customers.
The observed gains in customer engagement contributed to additional profitability and revenue for these institutions, helping to bolster the case for implementing and supporting additional Zelle® usage among customers. FIs should factor the financial benefits of Zelle® into their investment planning as they weigh technology and marketing priorities — and other intangible benefits (see The Intangible Benefits Of Using Zelle® below) — as they prioritize their investments.
This study didn’t analyze the impact of potential fraud and scams within peer-to-peer (P2P) payments that have recently received attention. Early Warning has previously said that “millions of consumers use Zelle® every day, with more than 99.9% of payments completed without any report of fraud or scam.”
