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It’s beginning to look a lot like [a BNPL] Christmas.

We’ve talked about BNPL before. Granted, it has been a while, but what we were saying back in April is just as true today as it was back then. The upshot? That BNPL is risky business. Check out this recent article on financebuzz: “Target and 30+ stores offering “Buy Now, Pay Later” for holiday shopping”. The headline pretty much says it all; stores are pushing BNPL hard for the holidays and they’re not waiting until Halloween to do it. Surprised? Probably not, since Walmart (among others) is already merchandising Christmas in their stores. And with the merchandising, lots of messaging around how wonderful your holiday will be if you overextend yourself financially over the holidays. It’s easy; simply buy now and pay later! The financebuzz article explains that “buy now, pay later (BNPL) services have become increasingly popular, especially during the holidays. They give you a way to include potentially expensive purchases in your holiday gift plans, especially if you’ve been trying to crush your debt and want to avoid making any money mistakes.”

Hmmm. Somehow the logic of that statement escapes me. How does buying expensive stuff help you “crush your debt”? Seems to me that this might fall in the category of “money mistake.” As I said back in April and I’ll say it again: I’m no economist, but I do understand the basic principles of sound money management and that hardly sounds like sound financial management to me. The financebuzz article goes onto list what they view as preferred BNPL providers that are participating:

Sezzle: A BNPL service that splits your order into four interest-free payments over the course of six weeks. There are no fees and no impact on your credit… as long as you pay on time.

Affirm:  No hidden fees, however, it’s possible to be charged interest depending on the payment plan you choose. Interest rates can range from 0% to 30% and potential monthly payment plans could include lengths of three months, six months, or 12 months.

AfterPay: You can split a purchase into four different interest-free payments, payable every two weeks. Your total payment period would be six weeks, with the first 25% of the total price happening immediately. If you don’t make your payments on time, you could be hit with late fees that are capped at 25% of the order value.

Why are retailers pushing BNPL so hard for the holidays. It’s obvious. For them, it’s good business. But is it good for consumers? On the upside, I understand that BNPL is convenient and low-cost (as long as you follow the rules) — at least compared to many credit cards — and consumers, especially younger ones, seem to love it. And according to proponents of BNPL, “when used responsibly,” BNPL can actually help consumers manage their budgets.” Although, I think I’ve also heard similar claims about “responsible use” with other products… among them, credit cards and alcohol. And so, it goes.

But despite their growing acclaim and popularity, are these services really safe?  The bottom line, according to financebuzz, is this: “BNPL options offer appealing ways to afford different types of shopping purchases. But be wary of the terms and conditions, especially if there are interest charges or late fees. Not complying with these terms is risky and could put you into debt if you’re not careful.” I would say so: Interest rates that can reach 30%? Late fees up to 25% of your total order’s value? This is certainly the kind of stuff that you want to be “wary of”! Especially when, as cited in a recent Personal Finance article, that “nearly 70% of buy now, pay later users admit to spending more than they would if they had to pay for everything upfront” and that “42% of consumers who’ve taken out a buy now, pay later loan have made a late payment on one of those loans.”

In addition to potentially high interest rates and late fees, consumers seem to be defaulting on these BNPL lending agreements at alarming rates. According to a study by Credit Karma, right now, consumers are “relying on Buy Now, Pay Later amid record inflation, and using their credit cards to pay off their debt. Among respondents who have used BNPL products to pay for an item, 40% currently have an outstanding balance. Those carrying a balance owe an average of $665. When asked about the largest amount ever owed across all buy now, pay later services, one-in-five reported owing more than $1,000. This may be fueling a cycle of debt for some consumers. In fact, nearly a quarter of BNPL users say their debt load increased after using Buy Now, Pay Later products to make a purchase.”

As for those who make their payments regularly — perhaps those younger users hoping that by doing so, they’re building credit — well, there’s some not-so-great news here, as well. That’s because, unbeknownst to many BNPL borrowers, these point-of-sale loans do not routinely appear on most credit reports. That means, of course, that a good payment record on your BNPL account won't help you build credit.

As if high interest rates and late fees, as well as the likelihood of default due to mounting debt weren’t enough, there’s also the potential for fraud. From CNBC’s Criminals love BNPL. “Buy now, pay later services aren’t just popular among consumers. They’re also proving to be a hit with criminals. One of the vulnerabilities is BNPL firms’ reliance on data for approving new clients, instead of conducting formal credit checks.”

These facts haven’t escaped the Consumer Financial Protection Bureau (CFPB). This past January,  the CFPB provided an update on a continuing investigation into five BNPL providers. The update included an invitation to “any interested parties, including consumers, small businesses, consumer advocates, financial institutions, trade associations, investors, state and Federal regulators and Attorneys General, and experts in consumer lending, payments, and marketing to submit comments to inform the agency's inquiry.” That information, says the bureau, will aid them in furthering their investigation. 

And just the other day — in their September 15 article, “CFPB vows to rein in buy now/pay later lenders,” American Banker provided this update:  “After spending months examining the business practices of buy now/pay later fintechs, the Consumer Financial Protection Bureau has produced an 82-page report that will help develop "interpretive guidance or rules" to cover gaps and consumer risks in the booming BNPL niche. The CFPB's market-monitoring exercise began early this year when it surveyed five top BNPL providers — PayPal, Affirm, Afterpay, Klarna, and Zip — and focused specifically on the "Pay in 4" style of loans that are spread over four equal segments, bypassing traditional lending regulations.”

What does this mean for community banks? Why not take this opportunity to let your customers know that you offer money/credit management guidance, along with the kind of financing that truly makes sense and meets their needs? A low-interest, no-fee credit card, for instance or better still, a HELOC? At the very least, it might be a good idea to remind your customers that using BNPL for their holiday purchases may not make for the most joyous post-holiday season… especially when they get to that “pay later” part of the loan.

About Bank Marketing Center

Here at BankMarketingCenter.com, our goal is to help you with that topical, compelling communication with customers; the messaging — developed by banking industry marketing professionals, well trained in the thinking behind effective marketing communication — that will help you build trust, relationships, and revenue. In short, build your brand. Like the below Buy Now Pay Later campaigns, for instance, which you'll find in our portal and will help you get the message out to your customers quickly and easily.

To view our marketing creative, both print and digital – ranging from product and brand ads to social media and in branch signage – visit bankmarketingcenter.com.  You can also contact me directly by phone at 678-528-6688 or via email at nreynolds@bankmarketingcenter.com.  As always, I would love to hear your thoughts on this subject. #bankmarketing #communitybankmarketing #homeequitylineofcredit #HELOC #BNPL


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They’re phishing. And you’re the phish they’re after.

Did you know that phishing attacks are responsible for more than 80% of reported security incidents? According to CISCO’s 2021 Cybersecurity Threat Trends report, about 90% of data breaches occur due to phishing. Phishing is leading the charge as a profit center for cybercriminals, and with it comes ransomware among other dangers. Not surprisingly, an estimated 94% of ransomware arrives at businesses via phishing emails, which can present themselves as an urgency to act or the impersonation of an individual or brand.

October is Cybersecurity Awareness Month, a time to remind ourselves (and if you’re a bank, your customers) that cybercrime continues to rise. This past year has brought us an exponential increase in fraud and scams… in particular, crimes that involve financial institutions. Every day, in fact, thousands of bank customers are targeted by scammers — often posing as bank employees — who first steal their personal information, then their money. 

Newly released Federal Trade Commission data shows that consumers reported losing more than $5.8 billion to fraud in 2021, an increase of more than 70 percent over the previous year. The FTC received fraud reports from more than 2.8 million consumers, with the most commonly reported category once again being imposter scams, followed by online shopping scams. “While scammers target consumers using every possible method of communication, phone calls were the most common,” the agency states. And, unfortunately, the agency says, approximately 15% of fraud cases go unreported. 

A bit of history. Cybersecurity Awareness Month was launched by the National Cyber Security Alliance (NCSA) and the U.S. Department of Homeland Security (DHS) in October 2004 in an effort to help Americans stay safer and more secure online. When Cybersecurity Awareness Month first began, those awareness efforts centered around advice like updating your antivirus software twice a year to mirror similar efforts around changing batteries in smoke alarms. Much has changed since then. Cybersecurity Awareness Month has grown significantly — according to the National Cybersecurity Alliance — in both reach and participation. In an effort to protect both individuals and companies from cyberattack, the Cybersecurity and Infrastructure Security Agency (CISA) now manages the program, and each year launches a campaign to raise awareness of cyber threats and the importance of protecting personal information. “Operated in many respects as a grassroots campaign, the month’s effort has grown to include the participation of a multitude of industry participants that engage their customers, employees, and the general public in awareness, as well as college campuses, nonprofits, and other groups.”  

A sign of that significant growth? Participation by the federal government and the banking community. Federal agencies are now paying real attention — and justifiably so — to cybercrime. Valuable guidelines and resources can be found on federal agency websites such as, usa.gov, the US Department of Justice, and the Federal Trade Commission. These sites go into great detail, describing the various types of cybercrimes and what action individuals can take to protect themselves. The American Bankers Association has also become an active participant, having launched #banksneveraskthat back in 2020 and watching this program grow tremendously over just the past two years. Today, over 2,000 banks participate. And, it's not too late to take part. To learn more, visit #banksneveraskthat.

What can you do? As their financial institution, it’s imperative that your customers know that their personal information, and their money, can be lost to fraud if preventative steps are not taken. Remember, too, that your customers aren’t the only ones who suffer. Banks like yours face significant monetary and reputational losses from these increasingly sophisticated scams targeting your customers.

About Bank Marketing Center

Here at BankMarketingCenter.com, our goal is to help you with that vital, topical, and compelling communication with customers; messaging that will help you build trust, relationships, and with them, your brand. Visit our site now to view our new campaign addressing cybersecurity, which you can customize and put in front of your customers in just minutes.  Here are just a few examples of the new creative:

To view our marketing creative, both print and digital – ranging from product and brand ads to in-branch brochures and signage – visit bankmarketingcenter.com.  Or, you can contact me directly by phone at 678-528-6688 or email at nreynolds@bankmarketingcenter.com. As always, I would love to hear your thoughts on this subject. #banksneveraskthat #communitybank #bankmarketing #cybersecurity

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What’s in it for me? I’m glad you asked.

What’s in it for me? It sounds pretty selfish, doesn’t it? As if you’ll only give someone the help they’ve asked for unless you somehow benefit personally.  In actuality, the question “what’s in it for me”? or WIIFM — as marketing folks who favor acronyms have dubbed it — is more of an answer than it is a question and serves as the very foundation of all effective marketing communication.

Harkening back to my agency days, which I like to do as you know, I remember the concept of WIIFM being drilled into all of us agency youngsters by the older, more experienced members of the creative department. It is so important a concept, that it is (or at least, SHOULD BE), an integral part of any Creative Brief. It certainly was back at the ad agency. It was so important, in fact, that we never took a single step in developing a campaign without getting the answer to that question. This required a deep dive into the demographic and psychographic characteristics of our target individual, which often meant plowing through lots of research decks or sitting behind one-way glass, eating M&M®s, and watching focus group attendees provide us with their thoughts on the product we were working on. 

The “me” in WIIFM is, of course, the consumer. With the WIIFM concept, you, the marketing person, are putting yourself in the consumer’s shoes and wanting to know the answer to a very simple question: “What’s in it for me?”, or to put it in a blunter form, “why should I care?”

Effective marketing messaging is built on knowing one’s audience and knowing one’s audience certainly plays an important role in our lives, outside of marketing. Say, for example, you’re looking for a job. Do you start an interview by saying “let me tell you about myself?” No. You start by doing research before your interview, learning about the company and the individuals with whom you’ll meet.  Where are they from?  What are their roles? Where have they been and what have they done? What are their expectations?  You use this information to make connections and build relationships. Only THEN, can you begin talking about the role and why you’re the ideal candidate.

One of the best examples I think I’ve ever seen of how an emotional connection can influence a decision was in a self-promotion print ad created by an ad agency.  The ad’s visual was in the fashion of a split screen. On the left side, a young man was hitchhiking with a sign that simply said “Seattle.” On the right, we saw the same young man with a sign that read: “Home for Thanksgiving with Mom.” Which sign, do you think, will earn him a ride? (PS: This is by no means an endorsement of hitchhiking!)

If you perhaps read our early August blog entitled, “The creative brief roadmap. Who needs one?  You do,” we talked a bit about “What’s in it for me?” and how instrumental it is in “getting into the head” (or more importantly, the heart) of your target individual and establishing that emotional connection.  Here’s a community bank example. You have a low interest, no-fee balance transfer credit card that you want to take to market. You could focus on a product feature such as savings with an approach like, “we offer the credit card that will save you money.” Do that, and you probably won’t grab the attention of many people. Instead, what if your approach focuses not on what the card does but what it MEANS; with something like, “now’s the time for you to take a step toward financial security in these uncertain economic times”?

I truly believe that this user-focused (as opposed to product-focused) approach to your messaging is far more likely to resonate with your audience. It’s subtle, but notice the use of pronouns? In the product-focused approach, the word “we” is used, while in the user-focused version, we use “you.” I think you'll agree that your messaging is far more effective when you ask (and answer) the question, "what's in it for me?" And, when you always put your consumer first, using "you" instead of "we."

As always, I would love to hear your thoughts on the subject. 

About Bank Marketing Center

Here at BankMarketingCenter.com, our goal is to help you with that vital, topical, and compelling communication with customers; messaging developed by banking industry marketing professionals, well trained in the development of effective marketing communication, that will help you build trust, relationships, and revenue. And with them, your brand. Like the below “HELOC” ads, for instance, which you'll find in our portal and, according to American Banker, are "back in vogue as lenders originated some $100.8 billion in home equity lines of credit, or HELOCs, through the first five months of the year." 

To view our marketing creative, both print and digital – ranging from product and brand ads to social media and in branch signage – visit bankmarketingcenter.com.  You can also contact me directly by phone at 678-528-6688 or via email at nreynolds@bankmarketingcenter.com.

#bankmarketing #communitybankmarketing