Original text here from Patrice Bernard (LinkedIn)
While banks worldwide are exploring opportunities to venture into peripheral businesses, particularly through the creation of marketplaces (under the pretext of a "super app"), Citi prefers to venture into the online commerce realm while staying firmly within its expertise.
Their new initiative involves an extension for major web browsers that, once connected to an eligible credit card, automatically identifies visits to over 5,000 websites offering cashback deals and suggests applying them with a single click during the checkout process. This will alleviate the frustration of consumers who often struggle to find the promotions meant for them.
The Citi Shop program is also a boon for the participating merchants, as it enhances the accessibility of the discounts they offer (and finance). They rightly hope that the spontaneous presentation of these discounts in the user journey and the increased visibility will encourage shoppers to complete their purchases, ultimately reducing cart abandonment rates.
Naturally, the bank also serves its own interest with this initiative. Besides strengthening its appeal to partner merchants, it should significantly improve the position of its credit cards as some of the most frequently used by cardholders. The recurring suggestion of their benefits during online shopping reduces the likelihood of using an alternative card.
Subscribe to our newsletter:
While I initially drew a parallel with the "beyond banking" initiatives currently in vogue in the industry, it's from the perspective of the bank's alignment with online distribution activities. However, Citi's method, which I would describe as "border banking," though less ambitious, is probably much more pragmatic and promising in terms of tangible results.
There's no need to rely on hypothetical trust to win over users, and participating merchants don't have to make any concessions or invest heavily in software integration. This approach promises better customer engagement, increased satisfaction among professionals, and undoubtedly, increased revenues in their core business.
The case of Citi Shop perfectly illustrates why I'm skeptical about financial institutions' aspirations to enter new markets in search of growth opportunities. Fundamentally, there's nothing wrong with it, and in some niches (excluding e-commerce), it may make sense. However, there is still so much to be done in the "digitalization" of essential services and optimizing the customer experience that embarking on what seems to be a premature diversification today appears quite risky.
