April 28, 2022
Illustration: Christopher T. Fong/Protocol
Good morning, and welcome to Protocol Fintech. This Thursday: fees vs. subscriptions, why Bolt’s being sued, and details on an alleged crypto trading scam.
For consumers, casually checking their bank account and seeing a monthly maintenance fee or overdraft charge is a frustrating experience, and fees are a major factor in banks’ low satisfaction ratings.
The challenge for banks is that their efforts to reduce their fees aren’t making a significant dent in improving customer dissatisfaction, according to a recent J.D. Power study. And banks are caught in a financial bind: A CFPB study showed that overdraft and insufficient-fund penalties made up two-thirds of reported fee revenue. A wobbly earnings season for big banks has made cutting a key revenue source even trickier.
There’s a solution neobanks have found, which is part marketing and part product design: Recast fees as subscriptions, and market premium memberships as time- and worry-saving features with a predictable cost instead of surprise charges that disrupt customers’ financial plans.
It does raise the question of why banks haven’t just rebranded fees as subscriptions instead of hitting customers with unknown and unexpected maintenance or overdraft fees.
Traditional banks are already undergoing a digital transformation, but is it enough? Bank of America reported that 53% of its consumer sales came from digital channels in the first quarter of this year. The question is whether it’ll start evolving its products alongside its distribution. Neobanks aren’t waiting to capitalize on the subscription economy.
— Lindsey Choo (email | twitter)A version of this story first appeared on Protocol.com. Read it here.
M&A and workforce reorganization can create a wealth of opportunities for companies seeking rapid growth, transformation and market expansion. In fact, 47% of executives say pursuing corporate M&As, joint ventures and alliances is their top growth driver in 2022. Unfortunately, nearly half of executives say talent acquisition and retention challenges are the biggest obstacle.
Forever 21’s parent company sued Bolt. The one-click-checkout software company best known for its mouthy founder made the retailer miss out on more than $150 million in online sales, retail giant ABG alleged. Bolt said Forever 21 was trying to renegotiate its agreement through legal tactics.
The Central African Republic made bitcoin legal tender. The digital currency will be accepted alongside the CFA franc in the country, where only 11% of the population has access to the internet. It’s the first country to follow El Salvador’s lead in adopting crypto as legal tender.
The Department of Justice charged a San Francisco crypto fund manager with fraud. Japheth Dillman, who’s set to appear in court today, was accused of a scam involving automated crypto trades.
WhatsApp is trying new strategies for peer-to-peer payments in India. It’s testing cash-back rewards and other features, moves that come amid of a general retooling of Meta’s payments strategy.
ProEdge can help you conduct a skill gap analysis across your organization and gain insights you can leverage to develop forward-looking plans while taking into account the needs of the entire enterprise, including individuals, teams and functions. In an M&A scenario, an upskilling program like ProEdge can also be used to uncover employees’ skills that weren’t utilized before.
Thanks for reading — see you tomorrow!