As a benefit for their card users, Apple recently announced a new high-yield savings account offering a 4.15% Annual Percentage Yield (APY), significantly higher than the national average. This investment in the payment and banking space has led some to question if there’s still a need for traditional relationships between banks and their Small Business customers. Not to mention, how brick and mortar financial institutions can compete in the evolving online landscape.
As we see it, there are at least three reasons why SMBs (and individuals) need traditional banking relationships:
- Traditional banks offer a wider range of products and services than Apple is prepared to offer. (Think checking accounts, certificates of deposit, loans, etc.)
- Traditional banks provide more ATMs and branches, convenient for those needing to deposit or withdraw cash frequently.
- Traditional banks offer the in-person customer service that only comes with a physical location. This one’s key for the millions of SMBs conducting business transactions.
However, we also recognize that taking advantage of Apple’s new savings account presents clear benefits. For example, the account itself is very easy to set up and use. Everything can be managed directly from iPhone—which, for most users, is always within reach. There are no monthly fees, the account is FDIC-insured, and, as we mentioned before, it has a competitive APY.
On the surface, this high-yield savings account is a very good option for individuals looking to bank on their own through a simple interface. But it is limited to the usability of a savings account. And that means, any individual or Small Business looking to take advantage of complete banking benefits should continue to turn to traditional institutions.
At the end of the day, Apple’s account option may be shiny and new, but it lacks a human element. And at Cargo, we believe that’s essential to doing business.
We’re not sugarcoating things here. As the Apple savings account takes hold, banks and credit unions will likely lose some customers and market share. It’s a natural occurrence when a new competitor enters the industry—just look at how Netflix and Spotify were affected when Apple stepped into the streaming space. Did these streaming giants lose some market share to Apple’s loyal fans? Yes. But they also had built strong customer relationships of their own, which continued to thrive.
The most important thing for banks and credit unions to do right now is invest in differentiation. Redefine the customer experience. Find new ways to make banking convenient, enjoyable, and unforgettable. Show customers that your institution is a valuable part of their financial security.
How? By taking a page out of Apple’s book.
Because the Apple savings account is limited to Apple Card users, we can assume iPhone user data is being leveraged to drive offerings. After all, that’s their customer base. We also know that Apple is committed to simple, clean interfaces that support an easy experience. Any bank or credit union can follow these examples by using their own customer data to develop targeted, customized solutions for their customers.
Not sure where to start? That’s where we come in.
Here’s the secret to competing with Apple:
Take your Brand from ordinary bank to daily financial advocate.
Make your bank or credit union an essential part of your customers’ daily routine by taking your Brand from ordinary bank to daily financial advocate. Serve your customers with resources, advice, services, and solutions that make your institution an indispensable part of their financial lives. Bring the human element into banking. That’s what will differentiate your Brand from the competition.
At Cargo, moving hearts to move minds is what we do. We partner with Brands like yours to help you better connect with and sell to your Small Business customer, no matter what the future holds.
So, if you’re looking to activate a campaign, refresh your brand, or even build a custom banking app—let’s talk. Our team of expert creators, developers, designers, and storytellers is ready to help you build a strategy that gets results.