Groupon is the brand widely regarded as spawning the daily deals craze. In its IPO filing on June 2, the company showed a 22,000% increase in revenue in the past year (that's 22 thousand percent).
Is it any wonder, then, that the local deals and discounts market is booming? Thousands of Groupon-like deals services, sites and brands seem to be launching on a daily basis. So it was only a matter of time before banks got into the act. Why? Because recent regulations have cut the income banks can make from credit card interest rates and overdraft fees. They're anxiously seeking new ways to generate revenue.
Enter a company called BillShrink. It's not exactly a Groupon for banks, but BillShrink is offering more than 2,000 banks its "Statement Rewards" service. According to the New York Times, Statement Rewards (introduced last October) is "part loyalty card, part daily deal... Under the program, online bank statements may include deals and discounts for bank customers based on their recent spending."
Deals can also arrive on the bank customer's smartphone to make it easy to instantly take advantage of a deal or discount offered by a local retailer in proximity to the smartphone user. Participating banks and BillShrink get a cut of each transaction.
The concept brings a whole new meaning to the monthly statement from a bank. Now that statement could include deals and discounts offered by retail establishments and merchants with whom the bank customer already does business. If a customer spends $100 per month with a particular retailer, for example, a discount coupon may show up in his or her statement. As an extra bonus, the customer can use a debit card to redeem rewards.
That could even eliminate the need for belonging to multiple loyalty programs, since "your debit card or credit card becomes the master loyalty card," says Schwark Satyavolu, CEO of BillShrink. Satyavolu tells the Times that banks "need to do things that are consumer friendly, where the consumer actually gains when they make some revenue."
Of course, some bank customers may balk at the idea, viewing the marketing as inappropriate for their banking relationship. No problem — those customers can choose not to participate in Statement Rewards. For others, though, it may actually improve the manner in which consumers view their banks, according to Deborah Wood, general manager of marketing and industry research for Jack Henry & Associates, the company that worked with BillShrink on Statement Rewards. Wood says "The consumer probably hasn't looked at the bank as a way to save money."
Yes, and the consumer probably hasn't looked at the bank as a deal-maker either. But then, Groupon has created a whole new marketing world — and it looks like banks want to get a piece of that action.