JUNE - JULY 20258EUROPEEUROPEMY OPINIONINRetail Payment Business is one of the most important and not only for the financial industry. Its importance can be understood as it provides a substantial amount of revenue for payment players and valuable data to understand customer behaviour and provide important customer insights and product and service suggestions.Big financial institutions, Neo Banks--FinTech and big brands such as Apple and Amazon--are fighting to get their share in this industry. At the same time, we observe pressures from EU regulations such as PSD2 and the instant payment framework, which seek to protect consumers and put pressure on the banking industry to reduce the cost of payments.The appeal for financial services to Millennials and Gen Z goes beyond the fact that together those age groups dominate the population. Millennials and Gen Z seek something different than traditional banking. More than half of this audience is willing to switch financial services providers.The solution to these challenges is to embrace the subscription model.Every financial marketer dreams of creating a customer experience equivalent to Netflix, Amazon Prime, and Disney+ with their wildly successful subscription model and embedding it in their culture and strategy. Currently, subscription models are as widespread as ever, transforming the landscape of various consumer industries such as video streaming, music, software, cloud technology, and others.Digital competitors have repackaged fees as subscriptions, a pill customers are more than willing to swallow in the digital age. These subscriptions are often designed as `market premium memberships' that provide a cost-effective option instead of a surprise fee.How to build a subscription model best practice:· Dive deep into the available data and create the appropriate packages for targeted segments.· Be simple and relevant. Do not create too many packages as the consumer will be confused to choose the most appropriate.· Price correctly in order to not cannibalize existing fee income but increase it, adding more consumers that do not transact with you.· Be innovative by incorporating not only Banking/Payment features but Non-Banking Features for the daily life of the consumer such as Energy/Telecom/Retail shopping.BRINGING SUBSCRIPTION MODELS TO THE FINANCIAL INDUSTRYBy Ioannis Roussos, Assistant General Manager, EurobankIoannis Roussos
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