What makes customers stay? The subscription opportunity for banks

Giles Tongue, VP of Marketing at Bango, examines new research on why customers want subscription benefits from their bank, and what the gap between that demand and current provision means for loyalty.

Key takeaways

•      Only 9% of consumers who already receive subscription benefits get them through their bank.

•      39% of US consumers say they would be more loyal to a bank or financial provider that helped them save money on subscriptions.

•      28% of consumers expect streaming services as a perk from their financial provider, rising to 43% of Millennials and 48% of Gen Z.

•      Half of Millennials and 48% of Gen Z say they would switch provider for free access to subscriptions they wanted.

Almost two in five Americans (39%) say they’d be more loyal to a bank or financial provider that helped them save money on subscriptions. Yet, while many already get subscriptions through mobile providers, retailers, and other companies, only 9% of those customers get one through their bank.

Those figures come from Banking on loyalty, new Bango research with 2,500 US and 1,500 UK consumers exploring their attitudes to subscriptions, bundling, and the role banks and financial providers could play in the subscription economy. 

Subscription benefits are becoming an expectation Do customers expect subscription benefits from their bank?

More than a quarter of US consumers (28%) expect streaming services as a perk from their financial provider, rising to 43% of Millennials and 48% of Gen Z. 

That expectation makes sense when you look at what customers already get elsewhere. Mobile operators have bundled entertainment services for years, while retailers and other membership businesses increasingly include subscriptions as part of their customer propositions, so people are getting used to receiving services they recognise and use as part of a wider package.

Customers already understand the idea of getting subscriptions as part of another service. For banks, the opportunity may be in how they make those subscriptions part of the banking experience, rather than simply adding another perk to an account.

Build the relationship beyond redemption Why a voucher loses the customer relationship

There’s a big difference between giving someone a voucher for a subscription and giving them somewhere to manage it.

With a voucher, the customer redeems the offer and then goes elsewhere to manage the subscription, which means the bank may pay for the benefit while much of the ongoing relationship sits with the subscription provider.

A subscription hub within the banking app keeps more of that experience in one place, allowing customers to choose services, activate them, make changes, and upgrade without having to manage each subscription separately.

Bango research gives us an interesting indication of how customers respond when they already receive subscription benefits through their bank: 61% say they’d be more loyal to a bank that saves them money on subscriptions, compared with 39% of Americans overall. This is a correlation rather than a causal finding, and the two groups are not directly comparable.

We can’t say from this research that receiving subscriptions caused the higher loyalty figure, but it does give banks a useful question to test: do customers stay longer when subscriptions they regularly use are attached to their account?It does give banks a useful question to test: do customers stay longer when subscriptions they regularly use are attached to their account?

Give customers benefits they actually value Which subscription perks do customers actually want?

Half of Millennials (50%) and 48% of Gen Z say they would switch financial provider if it gave them free access to subscriptions they really wanted.

A customer who spends every evening watching their preferred streaming series may see little value in a fitness subscription, while someone else may happily choose fitness over streaming. Giving customers a selection across entertainment, fitness, learning, and digital security means they can choose services that fit their own interests, rather than receiving a fixed package decided for them.

For paid accounts, that choice could also make the value easier to judge. If customers can select subscriptions they already pay for, they can compare those savings directly with the monthly account fee.

A bigger role in subscription spending? Could banks manage subscription spending, not just offer perks?

Almost three in ten Americans (29%) identify banks as the safest option for managing their subscriptions in one place, which is interesting when you consider how fragmented subscription spending can be. One service might be billed directly, another through an app store, and another as part of a bundle, making it surprisingly difficult to keep track of what you have and what you’re paying for.

There’s an AI angle here too, with 26% of Americans saying they would let AI choose their subscriptions if it saved them money.

For banks, that raises a bigger question: could they move from providing subscription benefits to helping customers manage more of their subscription spending?

It could start with giving customers access to services they want, with one place to choose and manage them, then develop into helping people understand what they’re paying for, where they could save, and which subscriptions they want to keep.

Over time, subscriptions could become part of a longer relationship with the customer, starting with access to services they enjoy and developing into a place where more of their subscription spending can be managed.

Younger customers are showing strong interest in subscription benefits, customers want more choice over the services they receive, and some are already comfortable with the idea of their bank helping them manage subscriptions. What banks now need to understand is how those behaviours translate into loyalty and retention, and whether they can also give customers a stronger reason to pay for premium accounts.

Download Banking on loyalty from Bango for the full research.

Frequently asked questions

Do customers want subscription benefits from their bank?

Yes, and the demand is largely unmet. 39% of US consumers say they would be more loyal to a bank that helped them save money on subscriptions, while only 9% of those who already receive subscription benefits get them through a bank. Expectation is highest among younger customers, with 48% of Gen Z expecting streaming services as a perk from their financial provider.

Why does a voucher lose the customer relationship?

With a voucher, the customer redeems the offer and then manages the subscription elsewhere. The bank carries the cost of the benefit while the ongoing relationship sits with the subscription provider. A subscription hub inside the banking app keeps selection, activation, changes, and upgrades in one place.

Which customers are most likely to switch banks for subscription perks?

Younger ones. Half of Millennials and 48% of Gen Z say they would switch financial provider for free access to subscriptions they genuinely wanted, compared with lower rates across the wider sample.

About Giles Tongue

Giles is VP of Marketing at Bango, leading the global marketing of the Digital Vending Machine®, which is used by world-leading telcos, banks, and retailers to bundle subscription services such as Amazon Prime, Netflix, and YouTube. With over 20 years in brand and product marketing, Giles combines data-driven insights, customer experience, and original research to help partners unlock the full potential of subscription bundling. Before joining Bango, he held marketing roles at Unilever, consumer tech innovator tech21, and co-founded neuroscience-led AI startup and wearable tech company NURVV, building award-winning digital products and scaling new technologies to market.

 

About Bango

Bango enables content providers to reach more paying customers through global partnerships. Bango revolutionised the monetisation of digital content and services by opening up online payments to mobile phone users worldwide. Today, the Digital Vending Machine® is driving the rapid growth of the subscription economy, powering choice and control for subscribers. The world’s largest content providers, including Amazon, Google, and Microsoft, trust Bango technology to reach subscribers everywhere. Bango, where people subscribe.