Two of the country’s biggest retailers, Walmart and Walgreens, recently announced they are launching their own financial services. This makes sense. The pandemic has resulted in a shift in consumer behavior that now favors contactless and digital banking options, and with one in four U.S. adults considered unbanked or underbanked, this presents an opportunity to offer services to a deep and loyal customer base.
But as the pandemic has forced even traditional retail banks to rethink their business model, launching a financial service isn’t as simple as taking a successful retail model and applying it to banking. It needs to be both effective and secure. This is where fintech can step in.
As more and more retailers make this move, partnering and collaborating with fintechs can help them build, scale and secure their financial offerings. Building infrastructure and providing top-notch cybersecurity is at the core of what we do, not the sideshow. And the best way for retailers to attract, gain and retain customers — and do so in a meaningful way that adapts to the current environment — is to start focused, scale quickly and keep secure.
Helping retailers get up to speed
At Prime Trust, we have seen more and more retailers asking for guidance or specific widgets. They want to know how we can help them create more interesting product offerings for their customers as well as ensure the products are secure.
They turn to us because they don’t know where to start. We get it. From NFTs to Ethereum, the buzzwords are always changing. But the core problems remain the same. Every conversation about a new currency offers an opportunity to educate a potential customer on the fintech ecosystem, to explain how the blockchain works and how fintech companies can help.
As retailers expand banking opportunities, they will need help positioning their products, keeping them safe and selling them to end users.
Retailers looking to enter the financial services industry need to get to market quickly, especially if they have no previous experience in any type of financial or credit offering for their customers. The strategy behind speed is a hyperfocused offering.
Start with smaller services with much more focus, developing a deep understanding of what the customer wants and delivering a great experience from that. The sooner a retailer can gain a toehold in the market and start to gain mindshare the better positioned they will be when they start to scale.
For example, if a retailer wanted to start with a payment platform, it’ll need to open user accounts, fund those accounts and allow users to send or spend that money (maybe even buy some crypto). Work with them to create custodial accounts, adhere to a KYC/AMC compliance process, tie a debit card to those accounts and process the sending and receiving of funds. And if they want some crypto, fintech startups can source liquidity and convert fiat to crypto. These steps would help to establish a ground level for the retailer and a base to scale.
Whenever you have an education session with a retailer, you should help them understand the space and figure out how to position their entry. In return, retailers will help you sharpen your user profiles and sense of the marketplace, as well as push you to create plug and play widgets and APIs that you can offer your clients as your business expands.