For decades, Walmart has prided itself on its low prices. They’re virtually unbeatable. But those staggeringly low numbers they call prices aren’t so eye popping anymore. It’s the much larger numbers that are mind boggling: Walmart checking accounts.
Your credit union or community bank needs to enhance its’ consumer experience if you want to drive Walmart’s checking account numbers down again.
A Quest for Market Dominance
Economists report a collective 873 million checking accounts among U.S. consumers and small businesses as of June 2022. Walmart’s checking account market share is about 10 percent of that number!
That’s right. The big box retailer currently services more than 100 million checking accounts…larger than any financial institution nationwide. For context, Bank of America (the runner-up) services 68 million checking accounts.
And the retail giant continues to open checking accounts at a rapid pace – about 9,000 per day. Economists predict Walmart will achieve checking account market dominance within this decade.
Marketing Muscles and Profit Pioneers
As a business model, Walmart (and its exceptional brand power) engineered a way to make its checking accounts profitable, an area where credit unions and community banks remain stuck. In fact, about 95% of financial institutions lose money with checking accounts.
You’ll need a profitable consumer base to start catching up to Walmart. Leverage perks like interchange income by giving your members or customers a reason to spend. Roll out EMV (chip cards) if you haven’t already, which reduce losses when a retailer is breached.
Develop relationship rewards programs to give benefits to your most loyal members or customers. Use these programs to offer loan rate discounts or refund ATM fees when a certain transaction threshold is met for the month.
They’ve chosen you; now reward them.
The Newest New Sheriff in Town
Walmart is another example of a crowded financial services industry. If it’s not Walmart, it’s someone else. FinTechs continue to prove they can take what’s been done for decades and do it better. The sandbox is no longer yours.
That’s why credit unions and community banks need to determine their differentiator. You need an X factor. An experience for your members that can’t be replicated. A rewards program is a small part of that experience.
But more importantly, your unique experience is incredible service showing each consumer there’s still kindness in the world. It’s great financial guidance a retailer or FinTech can’t give to the consumer. And it’s your work’s ability to produce life changing stories of success during difficult times.
That’s how you remain relevant.
If you want help using an incredible consumer experience to beat Walmart, our On The Mark Strategies team will walk you through how to make it happen. Sign up for our journey mapping and member experience services today!