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The events of 2020 helped accelerate major shifts in consumer finance behaviors, needs and preferences. The surge of time spent at home supported increases in the amount of time consumers spent online. As a result, consumers began to rely on ecommerce for everything — from daily essentials to entertainment. A rise in online shopping encouraged more consumers to use electronic payment methods, including credit cards and buy now, pay later (BNPL) services.
When consumer behaviors changed, so did buying habits and attitudes toward finance. Banks, financial institutions, major credit card companies and fintech brands embraced the opportunity to pivot their marketing strategies and offer new solutions that were more relevant to consumers as the pandemic persisted.
Here are the top articles related to consumer finance advertising news published by DMS Insights in 2020.
Credit Cards Companies Adjusted Rewards Programs To Align With New Consumer Behaviors & Shopping Habits
Even before COVID-19 started to reshape consumer attitudes toward money, credit cards were dominating as the preferred method of payment across generations. In the early days of the pandemic, it was quickly evident that less contact was best, which caused many consumers to restrict their use of cash, increasingly opting for electronic or contactless payment methods. Whether consumers bought groceries online to pick up curbside or subscribed to various streaming services for at-home entertainment, more and more consumers were virtually swiping credit cards.
To remain competitive, major credit card companies began to pivot their credit card rewards programs to align with new consumer behaviors adopted in the early days of COVID-19. Instead of awarding points for airline miles or in-person experiences, companies like American Express, Chase, Brex and Capital One introduced new rewards benefits tied to purchases related to food delivery like DoorDash and Uber Eats, remote working tools like Slack and Zoom and streaming services like Netflix. Some credit card companies shifted their rewards to focus on cash-back options, while others debuted donation options as part of charitable partnerships.
Check out these DMS Insights articles for more on credit card marketing in 2020:
- Credit Card Companies Shift Rewards To Recognize Consumer Desires During COVID-19
- From Boomers To Gen Z, Credit Cards Reign As Preferred Method Of Payment
As Ecommerce Surged, Consumers Gravitated To Buy Now, Pay Later Platforms
According to DMS Insights, from 2018 to 2019, downloads of buy now, pay later (BNPL) apps increased 162%. While these platforms were already on an upward trajectory prior to the pandemic, COVID-19 accelerated their growth. In Q1, many BNPL platforms and companies reported a boost in customers. As businesses and industries experienced shutdowns and limited operations as a result of COVID-19, joblessness climbed and unemployment hit record numbers. Economic uncertainty drove consumers to seek payment methods that offered flexibility without the need for personal loans.
Fintech platforms like Klarna, Affirm, Splitit and Sezzle provided consumers with the opportunity to complete purchases but provide payment over time, without adding to high-interest credit card debt. Encouraging a frictionless ecommerce experience, many major retailers began to offer optiona for consumers to use BNPL platforms during the online checkout process. BNPL helped brands cater to the needs of consumers during a time when flexibility and optionality mattered most.
Check out this DMS Insights article for more on the expansion of BNPL in 2020:
Digital Banks & Fintech Apps Took Center Stage As Consumers Sought Seamless Digital Finance Options
The last thing consumers wanted in 2020 was a clunky, complicated or time-consuming experience that required visits to brick-and-mortar locations to access money. Therefore, while stay-at-home orders kept most consumers indoors, use of mobile bank apps rose. It became clear that mobile apps hosted by digital banks had superior user tools compared to apps managed by traditional banks.
Many younger consumers were drawn to the simplicity of mobile apps for banking. Leveraging the power of AI and machine learning, digital banks like Chime were able to offer personalized services and empower consumers to have one-click transactional experiences. Other streamlined services offered by digital banks, including memberships, peer-to-peer payments and simplified lending, could give digital banks a boost heading into 2021, especially with younger generations.
Because customer relationships with financial institutions typically start at a young age, in 2020, many banks and fintech platforms focused on Gen Z as a pivotal audience. Acquiring and retaining more Gen Z customers could help scale growth and drive customer loyalty for years to come, because most of Gen Z has yet to complete many of life’s major financial milestones.
A key to establishing long-term customer relationships with Gen Z is generating strong brand awareness and providing consumer finance education, as much of Gen Z still largely lacks a sophisticated level of financial literacy. Fintech brands, like Step and Mozper, that are working to make financial literacy easy to understand have a greater propensity to grow and maintain Gen Z’s loyalty.
Check out these DMS Insights articles for more on the growth of digital banks and fintech apps in 2020:
- Digital Banks Use AI, Personalization And Sophisticated Apps To Appeal To Younger Generations
- Financial Brands Connect With Gen Zers To Engage Parents & Build Early Loyalty
Looking to Scale Customer Acquisition Efforts More Effectively In 2021?
Heading into the new year, consumer demand for seamless, frictionless and omnichannel online shopping experiences will continue. Brands and advertisers have the propensity to drive more conversions if they prioritize the shopper journey, including a careful consideration of the cart experience.
Digital Media Solutions® (DMS) helps brands flourish by capitalizing on consumer intent and engagement, deploying sophisticated adtech with big data intelligence to connect brands with consumers at the moments they’re most ready to take action, using messages proven to resonate.