JUNE - JULY 20259EUROPEEUROPEPros and cons aside, subscription economies provide consumers with control over their purchases in numerous ways· Position and Market from Daily Banking to Daily life· Provide the best C/X and U/I in order to ensure the consumer can easily onboard to the service and switch between packages.· If possible, make available tailor-made packages (build your own)· Offer tools and support to assist customers in selecting the most appropriate package.Benefits· It is a recurring, stable source of engagement that makes businesses better.· It protects the customer base and reuses attrition.· It allows a financial institution to personalize the customer experience and increase customer engagement.· It removes the friction for fees and charges as it provides value for money selected by the consumer.· It is essential that packages are transparent, as users need to know exactly what they are paying for at any given moment and do not have to worry about unexpected fees.· Flexibility is another benefit, as clients can change services without much overhead moving from package to package.Cons of subscription modelsOf course, subscription models in financial services are no guarantee of success. While its benefits may help attract young consumers, it has its drawbacks.· If it does not attract new clients or increase the engagement of existing clients, it is unprofitable.· Freemium services can lure in prospects, but firms must successfully funnel users into paid accounts by making their value propositions clear.· The flexibility to change services without overhead is beneficial to consumers, however it can be a drawback for financial service firms that want to keep attrition rates low. Making a service too flexible could force firms to focus on maximizing short-term fees rather than growing their relationships with consumers over time as their financial needs change.· Bundled services can add a sense of personalization, but of course, the effectiveness of bundling hinges on the quality of the experience. Subscription models are successful in part because they offer best-in-class experiences, particularly on the digital side. · Oversubscription models can create confusion for the consumer and the sales force.· No clear benefit for the consumer will result in low adoption by clients.· Emergence of super Apps that can dominate the world of subscription by aggregating options. Pros and cons aside, subscription economies provide consumers with control over their purchases in numerous ways. As consumers, particularly younger ones, become accustomed to this payment structure, the proliferation and sustaining power of the model will only increase. The financial services industry must decide whether to employ the work to succeed in the craze or risk being left unattended.
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