Big Tech and big data have the opportunity to remake entire industries.

The Bank for International Settlements (BIS) noted in its Aug. 31 paper, “From Clicks to Claims: Emerging Trends and Risks of Big Techs’ Foray Into Insurance” that some of the giant platforms operating around the globe are ones that “can bring benefits to consumers.”

“Big Techs can contribute towards closing the protection gap and to financial inclusion through efficient and low-cost distribution channels, improving customer experience via user-friendly digitalized interfaces and enhancing the digitalization of insurance operations,” the paper said. “In addition, they may offer innovative products to fill market gaps identified using their strong data intelligence on customer needs.”

But the BIS also cautioned that the “increased complexity of service provisions and concentration risk may not be adequately addressed” with current frameworks, so “a new Big Tech-specific regulatory approach might be warranted.” There’s risk inherent, too, as the paper contended there’s a “tendency towards excessive concentration in the provision of both financial and technology services.”

The insurance sector, the BIS added, is being transformed by the integration of insurance products or services into the customer journey as they navigate online platforms through “embedded insurance” that is linked to the non-insurance offerings tied to those platforms. The embedded nature of those interactions can streamline processes as Big Tech companies market and sell insurance products through their online platforms, manage receipts of premium payments, and transmit/assist with the administration of claims payments to policyholders.

Embracing Digital Channels

PYMNTS data showed an increasing willingness on the part of consumers to embrace digital channels to manage healthcare — and to pay for it all. The report “Healthcare in the Digital Age: Consumers See Unified Platforms as Key to Better Health,” a PYMNTS and Lynx collaboration, found that more than three-quarters of respondents want to pay all their medical bills through online platforms. Payments are integral in the healthcare space, per a separate report on improving healthcare-related money mobility.

The digitization of the insurance industry is not confined to marquee names in Big Tech, or to healthcare. By way of example, past PYMNTS’ coverage of companies such as CCC Intelligent Solutions has illuminated how artificial intelligence (AI), with a nod to auto insurance in this case, is among the key tools automating some of the traditionally paper-based methods of interacting with claims and payments.

During a conference call with analysts tied to the company’s first-quarter earnings, CEO Githesh Ramamurthy said “our clients in the P&C insurance economy are increasingly focused on the need to manage the business through two powerful megatrends: accelerating operational complexity and rising consumer expectations. Last year, auto insurers in the United States paid out over $200 billion in claims indemnity and spent about $25 billion on administrative expenses to handle those claims.”

Ramamurthy noted that over 14 million auto claims have been processed using a CCC deep-learning AI solution.

Atlanta-based FinTech company Momnt has raised $15 million to grow its lending and financing platform.

Since its launch in 2020, Momnt has expanded its presence in the point-of-sale (POS) financing sector, beginning in the home improvement industry and then expanding into other verticals, the company said in a Wednesday (Sept. 6) press release.

“Momnt has been at the forefront of embedded lending innovation since its inception,” Sam Das, managing director of TruStage Ventures, which led the investment round, said in the release. “The team has proven to be a collaborative partner to its merchants and financial institutions, built on a foundation of leveraging the latest technologies to drive frictionless experiences for consumers.”

The company has continued to grow its team, having raised $16.5 million in previous funding rounds, according to the release. As part of its growth strategy, Momnt has expanded its team, adding Mark Satisky as chief financial officer and Dory Black as chief legal officer.

The newly raised capital will be deployed to further enhance Momnt’s platform, investing in its people, processes and technology, the release said. The company aims to revolutionize closed-loop, POS lending, enabling small businesses to broaden their customer base through flexible financing options with minimal friction.

The company’s leadership team remains committed to maintaining its growth trajectory and is actively seeking opportunities for expansion into new verticals, per the release. Geographic and product diversification are also planned as Momnt continues to explore new business horizons.

“Momnt is committed to shaping the future of financial technology by providing innovative solutions that empower businesses and customers alike,” Momnt CEO and Co-founder Barclay Keith said in the release.

The funding round comes on the heels of two partnership announcements by Momnt.

The firm teamed up with direct-to-consumer (D2C) lending platform Acorn Finance Aug. 8 to offer a lending solution for home improvement merchants. Acorn Finance has incorporated the features of Momnt’s financial technology.

In June, Momnt launched a financing partnership with online roofing company Roofle. The collaboration enables homeowners to obtain instant quotes, review offers and secure financing without leaving their homes.

For all PYMNTS B2B coverage, subscribe to the daily B2B Newsletter.

Intuit is using generative artificial intelligence (AI) to help small businesses make decisions.

The company, owner of TurboTax, Credit Karma and Quickbooks, debuted Intuit Assist, an AI-powered tool for its small business customers, according to a Wednesday (Sept. 6) press release.

“Embedded across Intuit’s platform and products with a common user interface, Intuit Assist will put the power of next-generation AI in the hands of customers,” the release said. “Intuit Assist uses powerful and relevant contextual data sets spanning small business, consumer finance and tax to deliver personalized financial insights to our 100 million small business and consumer customers.”

For example, the tool can help TurboTax users by creating a tailored tax checklist based on data the customer shares for quicker answers and insights, according to the release.

When users ask Credit Karma a question on managing their finances, “they aren’t met with a generic response,” the release added. “Instead, Intuit Assist will be able to connect the dots for members and provide personalized assistance based on their own financial data.”

The launch of Intuit Assist is as small- to medium-sized businesses (SMBs) are feeling increasingly pinched.

PYMNTS Intelligence found that 57% of SMBs have funding, although only enough to operate for 60 days or less, which highlights the need for new paths to financing.

“While it stands to reason that smaller SMBs are facing this dire situation — as 62% of SMBs with annual revenues of less than $150,000 do, 40% of SMBs that generate between $1 million and $10 million in annual revenue have no readily available financing options that they might need to stay afloat if there were a sudden drop in sales,” PYMNTS wrote in April.

This suggests there is a large and still untapped need for financing options to help offset potential cash flow shortfalls. In the absence of a line of credit or another source of income, 40% of the businesses surveyed by PYMNTS said they can use business cards to cover cash flow issues.

The study also found that the share of companies using business loans from online lenders, working capital loans from banks, and unsecured business loans was up 24%, on average, compared to 2022.

For all PYMNTS AI coverage, subscribe to the daily AI Newsletter.

While beauty brands have ventured into the realm of hospitality, looking to get a slice of the travel boom, hospitality brands are also seeking to establish a stronger presence with those who aren’t traveling by allowing consumers to recreate the experiences in the comfort of their own homes. 

This strategic shift has allowed companies to leverage their brand equity and expertise to offer consumers a wider range of products. One example of this trend is the Four Seasons Hotel, which ventured into retail by launching its own line of mattresses, bedding, and home items. The foray feels relevant as the hotel represents the kind of luxurious accommodations many dream of staying in and leaves many wondering how they make the Four Seasons experience an experience. 

The Four Seasons Experience  

The Four Seasons, has cultivated its brand over decades and stands as a symbol. By extending its brand into the retail sector, the hotel chain can tap into the loyalty and trust it has built among its guests. When consumers see the Four Seasons logo on a mattress or bedding set, they associate it with the comfort and luxury they have experienced during their stays. 

With that, the Four Seasons has offered customers an opportunity to buy a Four Seasons bed since 2019 but has reinvigorated its offering through a new retail campaign, “Dreams Belong Everywhere.” The campaign spotlights the Four Seasons Signature Sleep collection. 

“Our signature sleep experience is based on a 60-year legacy of innovation in partnership with sleep experts and feedback from the world’s most discerning travelers,” said Julie Bourgeois, senior vice president of retail, Four Seasons Hotels and Resorts. “Our Dreams Belong Everywhere campaign marries our core competency in sleep products and the sense of belonging guests feel at our inspiring hotel destinations. Australian model and actress, Gemma Ward, joins us as our campaign face, perfectly representing the warmth and sincerity that defines Four Seasons.” 

The Opportunity Brands See with Hotels 

Hotels like the Four Seasons Hotel are associated with luxury, comfort and flawless service, achieved through its elegant accommodations and exceptional amenities. This strong reputation has not only won over travelers and discerning consumers. Still, it has also enticed other brands to seek associations driven by the allure of the luxury experience that guests enjoy during their stays. 

To start, Vivrelle, a handbag and accessories rental service, has collaborated with Four Seasons Hotel Houston to offer guests complimentary access to its high-end accessories by prestigious brands such as Prada, Gucci, Dior and others. 

But it’s not just the Four Seasons reaping the benefits of its mission to provide a luxurious stay.  

Equinox Hotel is enhancing its minibars by including items related to sleep, skincare and sexual wellness, alongside the standard offerings of cold water and mixers. 

“We flip the traditional minibar on its head,” said Ara Patterson, vice president of food, beverage, and spa at Equinox Hotels told Glossy in April. 

Read more: Luxury Hotels Embrace Embedded Beauty 

Why Brands Bet on Hotel Experiences  

Partnering with hotels can be a strategic move for brands, offering a mutually beneficial opportunity to enhance their visibility, cater to a targeted audience and create a unique, memorable experience for consumers.  

Hotels provide brands access to a diverse and often captive audience of travelers. These guests, whether on business trips, vacations or special occasions, represent a broad spectrum of potential consumers. Partnering with hotels allows brands to showcase their products or services directly to this ready-made customer base. 

Hotel partnerships also offer brands a platform to increase their visibility and brand recognition. 

Collaborating with hotels enables brands to create memorable experiences for guests. Vivrelle’s partnership with Four Seasons Hotel Houston, offering complimentary access to high-end accessories, exemplifies this. By providing access to prestigious brands like Prada, Gucci, and Dior, the hotel enhances the overall guest experience, making their stay more luxurious and enjoyable. This can lead to positive word-of-mouth, reviews, and social media exposure for both the hotel and the brand. 

For all PYMNTS retail coverage, subscribe to the daily Retail Newsletter.

The JCPenney Co. has announced an investment exceeding $1 billion to enhance customer experience and operations. 

This signifies the latest step in the ongoing efforts to revive the department store chain. It also introduced a brand positioning and campaign named “Make It Count,” focusing on fashion accessibility, loyalty, local and cultural community support, and commitment to positive change. 

“We see a common truth for our customers. Too often, we are forced to make compromises between time and money, quality and price, responsibilities and enjoying life’s moments. We want to show customers that we are in it with them, just as we have been throughout our history, and investing in helping them make the most of their moments,” JCPenney Chief Customer Officer Katie Mullen said in the announcement. “‘Make It Count’ is our recommitment to them that JCPenney will keep putting in the effort to match theirs.” 

In 2023, the JCPenney brand is part of a wave of companies embarking on revitalization efforts, reflecting a broader trend where businesses see the post-pandemic transition as a chance to adapt and evolve.  

Much like many of its counterparts in the industry, JCPenney faces the challenge of striking a balance between preserving its familiar elements — such as its classic logo’s return — while introducing forward-looking innovations that can resonate with consumers whose shopping behaviors have evolved in recent years.   

Resonating and Staying with Consumers  

Dialing into its loyalty bid, JCPenney aims to be “genuinely rewarding” to its customers, whether they shop in-store or online. 

The retailer plans to offer inclusive designs for individuals of all body types, spanning apparel, beauty, jewelry, and home goods, all while providing value. It recently unveiled a collaboration with celebrity stylist Jason Bolden, aiming to revamp collections for two private labels, J.Ferrar and Worthington, designed to cater to individuals of all sizes, shapes, and body types. 

The launch follows a PYMNTS report highlighting that in today’s challenging economic climate, consumers are focused on cost-cutting across all aspects of their spending. They often encounter challenges in upholding brand loyalty when encountering more enticing offers, particularly for essential items. 

The report further highlights that all consumers emphasize to PYMNTS that their lasting loyalty is linked to aspects beyond just pricing. In the long run, consumers who prioritize seeking deals and base their spending on conditions may not ultimately constitute the most profitable customer base from a lifetime value perspective. 

Read more: Lower Prices Win Greater Loyalty From Today’s Fickle Consumer 

The Future of Loyalty and Retailers like JCPenney 

In July, PYMNTS reported that as inflation leads consumers to be more selective with their spending, marketplaces or retailers are positioned to surpass brand loyalty in terms of performance. 

Consider Ulta Beauty as an example. Ulta Beauty holds a prominent position in the beauty loyalty sector, thanks to its Ultamate Rewards loyalty program, which boasts an ever-growing membership exceeding 40 million. The interactions with the brand, whether in-store or online, portray dedicated loyalty members who share a deep connection with the brand. 

In June, Nicole Bernhardt, who leads Ultamate Rewards at Ulta Beauty, talked with PYMNTS about the importance of data when crafting offers and rewards. 

Bernhardt emphasized that the program extends beyond merely monitoring consumer trends and empowers the company to establish meaningful and personalized connections with consumers, ensuring consistent delivery of value to consumers.

According to Bernhardt, 95% of Ulta Beauty’s sales are directly associated with its loyalty program. 

Read also: Embracing Disloyalty: Are Consumers Rewriting Rewards Programs? 

For all PYMNTS retail coverage, subscribe to the daily Retail Newsletter.

Paysafe and Eightcap have announced a strengthened partnership to offer an innovative Embedded Trading Wallet solution.

The collaboration aims to provide a joint embedded finance solution for Eightcap and Paysafe’s shared partners and merchants in the European Union (EU), the companies said in a Wednesday (Sept. 6) press release. The solution will be launched later this year.

The partnership between Eightcap and Paysafe began in 2016, with Paysafe offering a wide range of payment options for Eightcap global traders, including digital wallets like Skrill and NETELLER, as well as various local payment methods, according to the release.

The newly introduced Embedded Trading Wallet utilizes Paysafe’s digital wallet infrastructure and Eightcap’s trading technology, the release said. This solution allows partners to offer a white-label, plug-and-play trading and payment wallet for their retail traders, making it easier and more convenient for them to engage in trading activities globally.

The Embedded Trading Wallet, hosted within Paysafe and Eightcap’s combined global licensing framework, combines compliance expertise and payments and trading capabilities to offer partners a seamless and secure trading wallet, per the release. This empowers partners to provide their customers with a convenient, secure and reliable trading and digital wallet solution.

Eightcap’s B2B embedded trading application programming interface (API) allows partners to seamlessly offer over 1,000 tradable instruments in stocks, indices, crypto, foreign exchange (FX) and commodities, according to the press release. By leveraging Paysafe’s digital wallet infrastructure, the firm can enhance its payment capabilities for global partners and traders.

Micah Kershner, senior vice president of crypto and digital assets at Paysafe, said in the release: “Embedded finance is the future, and we believe this solution will revolutionize the trader’s experience.”

Patrick Murphy, director of UK at Eightcap, added, “We are extremely excited to be entering into this new phase of our partnership. This solution will enable unparalleled payment capabilities for our global partners and traders.”

Paysafe reported Aug. 15 that its revenue for the second quarter increased by 6% year over year to $402.3 million. Revenue from digital wallet use, which saw double-digit growth earlier this year, continued an upward trend during the quarter, increasing 5% year over year.

The company has also been actively expanding its product offering and engaging in strategic partnerships with brands in Latin America and Europe.

The European Commission has named six tech giants as “gatekeepers” under its Digital Markets Act.

That distinction, announced Wednesday (Sept. 6), applies to Alphabet, Amazon, Apple, ByteDance, Meta and Microsoft, and gives the companies six months to comply with the Digital Markets Act (DMA), designed to curb anti-competitive behavior.

“Under the DMA, the European Commission can designate digital platforms as ‘gatekeepers' if they provide an important gateway between businesses and consumers in relation to core platform services,” the commission (EC) said in a news release.

Those services include things like social networks (Meta’s Facebook and Instagram, and ByteDance-owned TikTok), “intermediation” (Google Ads, Amazon Marketplace, the Apple App Store) and operating systems (Android and iOS).

“We note the designations that the European Commission has made and are committed to delivering services that meet our customers’ requirements within Europe’s evolving regulatory landscape,” an Amazon spokesperson told PYMNTS. “We will continue to work constructively with the European Commission as we finalize our implementation plans.”

A spokesperson for Apple shared this statement: “We remain very concerned about the privacy and data security risks the DMA poses for our users. Our focus will be on how we mitigate these impacts and continue to deliver the very best products and services to our European customers.”

"We support the DMA's goal of creating a competitive playing field in Europe but fundamentally disagree with this decision," a ByteDance spokesperson said.

"TikTok has brought choice to a space largely controlled by incumbents and this decision risks undermining the DMA's stated goal by protecting actual gatekeepers from newer competitors like TikTok. We're extremely disappointed that no market investigation was conducted prior to this decision and are evaluating our next steps."

Google addressed the designation on its company blog Wednesday.

“The DMA will require Google and other companies to make various changes to the way their products and services work,” wrote Oliver Bethell, Google’s legal director.

“For us, for example, that will mean building on the work we have done to provide consumers with information and opportunities to switch platforms or manage their data (such as Google Takeout and our Google Transparency Reports) and remind people about their choices (such as the choice screens we now offer in Europe).”

"We accept our designation as a gatekeeper under the Digital Markets Act and will continue to work with the European Commission to meet the obligations imposed on Windows and LinkedIn under the DMA," Microsoft said.

PYMNTS has contacted Meta for comment as well but has not yet received a reply.

Meanwhile, the EC said it has opened investigations into the merit of Microsoft and Apple’s contentions that some of their services don’t qualify as gateways. For Microsoft, those services are Bing, Edge and Microsoft Advertising; and for Apple its iMessage.

Apple argues that iMessage can be — and is — used in tandem with a number of other messaging services.

“iMessage is designed and marketed for personal consumer communications, and we look forward to explaining to the commission why iMessage is outside the scope of the DMA,” the company said in a statement to PYMNTS.

And Microsoft said it welcomed the investigation, arguing it would show that its products "operate as challengers in the market."

Passed last year, the DMA forbids platforms to prioritize their own services over those of competitors, and from amalgamating personal data from different services. It also bars companies from using data collected from third-party merchants to employ competitive practices against them, and says companies must allow users to download apps from rival platforms.

The Federal Trade Commission (FTC) is reportedly set to sue Amazon later this month.

The antitrust suit, the result of a four-year probe into the mammoth retailer, is “likely” to arrive soon, Bloomberg News reported Tuesday (Sept. 5), citing sources familiar with the matter.

Those sources say the lawsuit is expected to focus on Amazon’s marketplace, where third-party merchants — responsible for a majority of the site’s sales — have complained the company forces them to use its logistics service in exchange for better placement on its site.

PYMNTS has the FTC for comment but has not yet received a reply. A spokesperson for Amazon declined to comment.

Last month saw reports that Amazon was going to impose a new fee on third-party sellers that don’t use its logistics services. A report by Bloomberg — citing company documents — said that thousands of merchants that handle their own shipping would have to pay a 2% fee on each sale, along with the commission they already pay to sell products on Amazon’s platform.

“Seller Fulfilled Prime is a voluntary, optional program that enables sellers who independently handle the fulfillment of their products to have their offers receive the Prime badge,” a company spokesperson told PYMNTS.

“Due in part to the investment needed to develop and run this program and associated costs, there is a small fee associated with units sold through this program.”

Still, the fee has drawn criticism from sellers, especially in light of the antitrust suit.

News of the suit follows reports from August that company officials met with FTC commissioners and Chairperson Lina Khan. Gatherings of that sort are known as “last rites” meetings, considered the final step before the FTC votes to file a lawsuit.

The expected lawsuit follows one filed in June by the FTC, in which the commission alleged Amazon “tricked and trapped” millions of consumers into enrolling in its Amazon Prime subscription service without their permission, and also made it difficult for them to cancel.

Amazon has called the FTC’s claims “false on the facts and the law.”

And in May, the FTC announced a $5.8 million settlement with Amazon’s Ring doorbell camera unit after the agency said cameras had been used for spying on some customers. The company also agreed to pay $25 million to settle FTC allegations that it had violated children’s right to privacy by failing to delete Alexa virtual assistant recordings at their parents’ request.

Rumors that the FTC could file a wide-ranging antitrust case against Amazon had circulated for months. As noted here at the time, Khan’s past remarks would suggest she would be unwilling to settle with Amazon, and would instead ask the court to restructure the company.

The bankruptcies of five major cryptocurrency firms have been a boon for corporate turnaround specialists.

That's according to a report published Tuesday (Sept. 5) by The New York Times, showing that professionals such as attorneys, accountants, consultants and crypto analysts have billed more than $700 million in fees since last year. 

The report, based on the newspaper's analysis of court records, says that the sum is likely to balloon as cases involving FTX, Celsius Network, Voyager Digital, BlockFi, and Genesis Global continue in the months to come.

According to the report, while large fees aren't unusual in complex corporate bankruptcy cases, things are a bit different in the crypto world. The people who lost money are amateur investors, and these fees eat away at the funds owed to creditors.

The fees are “exorbitant and ridiculous,” said Daniel Frishberg, a 19-year-old investor who lost about $3,000 when Celsius collapsed. “At every hearing, they have an army of people there, and most of them don’t need to be there. You don’t need 20 people taking notes.”

The report says lawyers and other professionals counter that they are charging market rates for work that will in the end recover investors' lost funds. For example, attorneys in the FTX case have found more than $7 billion in assets, though the NYT says it's not clear how much of that money will go to creditors.

The NYT report argues that the rising fees are indicative of “the broken promises of crypto,” an industry sold to amateur traders as a way to get a seat at the high finance table.

And as PYMNTS noted last month, “the industry’s reputation as a lawless Wild West of digital innovation” was what attracted many of the sector's most enthusiastic disciples.

“The crypto community believed and had a real conviction that what they were doing was so new that existing laws could not possibly apply,” Amias Gerety, partner at QED Investors, told PYMNTS. “And in the history of financial services, there’s basically never been a group of people with any commercial success who had that conviction. [O]nce you have that conviction, then you start searching for excuses not to comply [with the law].”

Subprime account holders may be driven toward banking innovations in their quest for financial wellness.

It’s difficult enough to tread water as a consumer with subprime credit, whose 600 or below score often means they face higher borrowing costs and fees than consumers with prime or super-prime credit. And that’s before the Federal Reserve hikes interest rates, which is still on the table at least through the end of the year. 

So it may be a small wonder that consumers with subprime credit are looking for banking and payment innovations to assist them in managing their finances, per proprietary data prepared for “Credit Union Innovation: Credit Union Membership and Credit Profiles,” a PYMNTS collaboration with PSCU. Here, we see that a large 78% majority of subprime account holders want more payment capability innovations — which may include options such as Zelle or other real-time capabilities — from their financial institution (FI). This suggests a stronger sentiment for these innovations among these account holders, as the corresponding shares are 70% for prime and 53% for super-prime members. When it comes to mobile banking capabilities, which include innovations such as mobile check deposit, 59% of subprime account holders seek further innovations from their primary FIs, compared to 52% of prime and 44% of super-prime account holders.

Additional PYMNTS Intelligence research also finds that innovative financial products are increasingly considered must-haves by consumers when it comes to their primary FIs. The share of account holders who would switch or would consider switching FIs if their institution did not offer innovative financial products had jumped by nearly half since 2018 when only 19% of account holders said the same. That figure had risen to 29% by 2022.

In a PYMNTS interview, PSCU Growth Chief Brian Scott addressed how credit unions and other FIs may help their younger members struggling to get their finances on track. “They just have not had the same amount of time to create a savings ‘pool’ or even to create good financial habits, so they struggle more than other groups during a challenging economic situation. Creating programs that are specifically designed for financial education for younger consumers is one area that I think credit unions can really excel at and should be excelling at in this case…there’s a role for credit unions to play as influencers in financial services and financial wellness in particular. That’s something the credit unions should grasp onto — and own it.”

Subprime account holders may be seeking innovations towards financial wellness. Primary FIs seeking to keep these consumers may seek to provide these tools. 

The most lucrative retail subscription customers are discerning consumers who fall into two groups: multi-model subscribers with a balanced portfolio of different subscription types and VIP subscribers attracted to special membership tiers. Subscribers in these groups represent the greatest lifetime value (LTV), on average, among the various subscriber groups we identified.

PYMNTS’ latest data reveals that understanding the subscription preferences and behaviors of multi-model and VIP subscribers is critical for capturing and maintaining their interest.

These are just some of the findings detailed in “The Impact of Subscription Models on Consumer Choice,” a PYMNTS and sticky.io collaboration. This report examines the motivations driving consumers with different subscriber personas, trends in subscriber longevity, and the value and importance of user experience in retaining subscribers. It draws on insights from a census-balanced survey of 2,145 United States consumers conducted from June 20 to July 6.

Other key findings from the report include:

Multi-model subscribers lead in terms of the potential value they represent.

Multi-model subscribers account for 38% of all retail subscribers and boast the highest average LTV, at $3,021. Although they comprise fewer than 1 in 10 subscribers, VIPs also represent an exceptionally high average LTV, at $2,867.

Younger subscribers know what they want and are ready to pay for it.

Younger consumers dominate the multi-model subscription persona, with 45% of millennials, 44% of bridge millennials and 42% of Generation Z making up this persona. Similarly, a sizable share of millennials and bridge millennials fall under the VIP subscriber category. Younger consumers tend to focus on premium and balanced subscription portfolios, unlike older generations, who tend to opt for standard subscriptions.

Many subscribers are likely to add more subscriptions and stick to the subscription models they know when doing so.

VIP subscribers are not only a lucrative subscriber base but are also disproportionately likely to expand their subscription portfolio, with 61% favoring another VIP subscription. The trend of sticking to familiar models is prevalent across other subscription persona, too, with sizable shares of box and discount-refill subscribers also indicating a preference for adding more of the same to their subscription collections.

Subscription providers must realize the differences between subscriber personas and what motivates their choices to keep subscribers happy and gain new ones. Download the report to learn what the most lucrative subscribers want from their retail subscriptions.

Digital banking has become the primary way many members engage with their credit unions. These interactions are typically quicker and more convenient than traveling to a physical branch or an ATM. However, these transactions are also more susceptible to fraud. Criminals can more easily impersonate an employee or account holder and leverage social engineering to pilfer funds or personal data.

Artificial intelligence (AI) represents an incredible opportunity for both committing and combating fraud. AI tools increase the potency of fraud methods and the prevalence of fraud attacks. For example, fraudsters can use generative AI to make synthetic identities more convincing, while other AI tools can allow a them to orchestrate hundreds or thousands of scams simultaneously. Credit unions must deploy AI tools to combat fraudsters on their terms.

The “Credit Union Tracker®” examines how AI programs such as ChatGPT have made phishing and other fraud techniques even more dangerous for CUs.

Around the Credit Union Space

Data breaches are among organization’s most dreaded concerns, especially for financial institutions handling highly sensitive information. The Maine-based Franklin Mint Federal Credit Union recently confirmed that a data breach compromised members’ personal information. The breach included the names, Social Security numbers and account numbers of more than 140,000 members.

With the rise of digital banking, fraud attacks can now cause wider, more extensive harm than before. A recent attack at Connecticut-based Charter Oak Federal Credit Union left members locked out of online accounts for several days. Security personnel had to temporarily disable mobile and web access to prevent attackers from gaining entry. Soon after the system shut down, phony websites appeared, baiting members into logging in with their credentials. Thanks in part to generative AI tools such as ChatGPT, malicious actors can employ these tactics with the greatest of ease.

For more on these and other stories, visit the Tracker’s News and Trends section.

Countering Rising Fraud Threats to CUs

Fraud attacks against banks and CUs are nothing new, but consumers are taking them much more seriously than they used to. A recent study found that 74% of consumers rate fraud protection as a top-three priority when opening a new financial account, outstripping ease of use at 61% and good value for the money at 46%. CUs must implement strong measures to protect themselves and their members from fraud — or watch members take their business elsewhere.

This month’s PYMNTS Intelligence explores emerging fraud threats within the CU landscape and the strategies institutions can deploy to safeguard their members.

About the Tracker

The “Credit Union Tracker®,” a collaboration with PSCU, examines how AI programs have made phishing and other fraud techniques even more dangerous for CUs.

Air travel is complex.

And that complexity trickles down to nearly every customer and airline touchpoint — particularly airline refunds, a process that has become a pressing issue for travelers and airlines.

“Not only do you have a whole range of fare rules and ticket types, but you have various refund policies, including non-refundable or partial refund policies that you have to manage, you have a lot of government legislation, and on top of it all, you have a very complex payment ecosystem, meaning a lot of forms of payment, not just cards, but also things like Apple Pay and so on,” explained Kristian Gjerding, CEO of payment orchestration platform Cellpoint Digital.

This tangled landscape continually creates problems for airlines and often frustrates customers.

While there is no silver bullet to optimize payment refund operations, Gjerding explained that the best transformation airlines can make right now is to “automate as much as possible.”

“If you end up with a lot of manual processing, you are going to also end up with very unhappy customers and will see a loss of income and a loss of revenue,” Gjerding said.

The key, he added, is to “utilize sophisticated rules engines that are integrated into the airline subsystems in such a way that it leads to data integrity across multiple different systems.”

Still, that is a long way to go from where the airline industry is right now.

Peeling Back the Complex Layers of Airline Refunds

With many fare rules, ticket types, refund policies and government legislation at play, navigating the airline refund landscape can be a daunting task.

During the COVID-19 crisis, vouchers emerged as a predominant solution for airline refunds.

“[Vouchers] help airlines do a number of different things,” Gjerding told PYMNTS. “It retains the passenger within their ecosystem, and it’s easier to manage with the airline if they have the system to manage it. But from the passenger’s perspective, it has certain constraints. From the consumer perspective, they would probably like to see a refund of cash fast into the form of payment that they used.”

Airlines already face many different layers of complexity across the entire operational journey. That’s compounded from the traveler’s side by an increasingly complex payment ecosystem.

Gjerding explained that airlines should move “toward a very traveler-friendly environment, where you have a high degree of self-service” during the refund process.

“If you add in vouchers, it’s even more complexity, unless [the airline] already has a voucher system geared towards exactness,” he said. “… [T]here’s a big difference between a free drink voucher at the airport and a [flight] voucher with certain fair rules that is exchangeable for another voucher with similar fair rules.”

That is the main challenge that needs to be simplified.

And “payment orchestration is a core part” of streamlining the complexity, said Gjerding.

The Ideal Refund Program Is Self Service

In the quest for a seamless and automated experience, airlines are exploring innovative solutions to enhance their voucher systems. One such solution gaining traction is the Universal Airline Travel Bank (UATB), which offers a comprehensive platform for voucher systems.

With its robust features, UATB has become the go-to solution for some airlines, enabling them to issue vouchers in various forms, including single-use credit card vouchers that can be used anywhere. Moreover, payment orchestrators are expanding their capabilities to meet the growing demand for voucher issuance, ensuring seamless integration with existing systems.

“Ultimately, [the ideal airline refund] is a self-service environment where the system just issues it straight to my mobile device or device of choice,” explained Gjerding. “And it either puts the money straight back into the payment I used, or if it’s a voucher for a delayed flight, it just gives me my hotel options or food options or a combination thereof.”

He added that today’s consumers and travelers are “pretty sophisticated” and capable of dealing with modern solutions to the airline refund conundrum that don’t require 16- or 20-digit credit numbers or sitting down in front of a computer.

“On a practical level, when airlines aren’t automating these processes, they are losing money because it is a waste of [human] resources,” Gjerding said. “It is a good thing to have automation and sophisticated capable systems that create a great user experience and that are future-proof.”

By leveraging payment orchestration, Gjerding said, airlines can automate their systems and ensure data integrity, creating a simplified and smooth experience for the traveler.

Nine months into his tenure at the helm of Basware as CEO, Jason Kurtz told Karen Webster the dynamics between buyers and suppliers are ripe for improvement.

CFOs grapple with suppliers’ requests for payments that come in across a dizzying array of different channels — paper invoices, PDFs, e-mails and even faxes. 

Suppliers, of course, want timely payment. But that’s no easy task given the buyers’ operational complexities, especially with multinational enterprises. On-premise and cloud-based technologies are hallmarks, and a pastiche of procurement systems crowd the back office.   

As a result, “90% of companies out there cannot pay a supplier on time,” said Kurtz, noting that the pain points are in place across all manner of industries and verticals. 

Overcoming the Inertia

And yet, a level of inertia continues to inject friction in the buyer/supplier relationships, said Kurtz.  

In a market saturated with AP automation providers, many executives have found that their invoicing, procurement and ERP upgrades and initiatives have drained time and money over the past several years. Those initiatives have not delivered the ROI that had originally been promised. In the present environment, as interest rates have soared, the cost of capital is high, remote workforces are the norm, and executives are re-examining how technology can help them collaborate with their suppliers.

Observed Kurtz, “a lot more treasurers and CFOs are interested in our products and solutions,” that streamline workflows and integrate the sending and receiving of data, documentation and buyer/supplier payments.  

There’s an added tailwind in the fact that new regulations in Europe mandate the electronic transmission of invoicing and payment data as soon as next year. Kurtz emphasized that Basware is seeing robust demand from enterprises for a single-source supplier in countries such as Spain, Poland and Germany where eInvoicing regulations are in place or are mandated to be in place over the next several months.  

The ability to improve cash flow and pay vendors on time, said Kurtz, can and will prove to be a strategic differentiator in B2B interactions. In many markets, supply chains are still constrained, even after the pandemic. He offered up a scenario where a supplier only has a limited stock of inventory on hand and will choose to sell those scarce units to the buyer who’s proven to be a good partner, forthcoming with speedy payments.

Where it Begins 

The improved buyer/supplier interactions, he told Webster, start with eInvoicing. Making it easier for suppliers to send invoices, for those invoices to be acted upon by the buyers — and to start the transaction process itself — improves the continuum of sending and receiving payments.  

“By ‘ingesting’ better,” he told Webster, of the invoicing process, “whether it’s paper or a PDF, that can automate and streamline the process and get you to much better efficiency and effectiveness. That’s a big theme, and a big friction that we work on.” The Basware Network, he added, also offers buyers a single point through which to connect with all of their suppliers, enabling those suppliers to receive purchase orders and send invoices electronically.

Integration of Paper and Processes

Data, of course, lies at the heart of it all, and, as Kurtz contended, the quality of that data is critical. In integrating paper and digital channels, he gave a few examples of how data and analytics can lead to better efficiencies within an organization. Basware, he said, through Basware Insights, helps client firms embrace touchless invoice processing, while SmartPDF invoice capturing service extracts data from PDFs and turns that data into eInvoices.

“We benchmark our customers and see where their points in the process that we should add automation, including the AI coding of invoices as they come in,” he said. 

“The data that we capture,” he continued, with a look ahead, “gives us the opportunity to keep on adding more services and capabilities.” 

He noted that payments represent a significant opportunity on the long-term roadmap, as Basware touches thousands of buyers, millions of suppliers and 180 million invoices, representing 500 million euros annually.

Consolidation on the Horizon 

The AP automation industry itself is ripe for change, too, said Kurtz. Simply put, it’s time for the ranks to be thinned. In every country, there are local players, and of course, there are bigger, multinational providers, too, and many enterprises buy AR offerings from one supplier, AP solutions from another vendor.

“There are too many players in the space right now,” he told Webster, “particularly in the enterprise segment, which is where we play. There’s got to be consolidation.”

In fact, he said, the market itself wants to see a single company on the scene that can deliver a continuum of services and offerings, spanning procurement AP and invoice and accounts receivable automation while adding payments into the mix.  

“We’re the best positioned to do that,” said Kurtz, “because that’s where we focus — and we have a head start in terms of the number of customers and volume….to become the 800-pound gorilla and consolidate the industry.”

Basware, for its part, will seek to acquire companies rooted in providing order-to-cash solutions. 

“That’s the future,” he told Webster, “and that’s what’s definitely coming.”

As he told Webster, “there’s more of a need for technology than ever before…and when you think about the [AP automation] space, it’s amazingly resilient — and it’s amazing how fast it’s growing, and how big the opportunity is.”

In today’s uncertain macroeconomic landscape, credit products have become essential for managing spending and cash flow.

In “The Credit Economy: How Younger Consumers Make Credit Decisions,” PYMNTS examined credit-related behaviors and attitudes based on a survey of nearly 3,400 consumers across generations to understand the driving force behind their interest in using credit cards and buy now, pay later (BNPL) for everyday and occasional purchases.

Findings captured in the report showed that a significant portion of consumers rely on credit, with 55% of cardholders carrying monthly balances on their credit cards. Baby boomers and seniors are the most likely to pay their credit card balances in full, but only 50% do so every month.

In contrast, at least 4 in 10 millennials and Generation Z consumers pay their credit card balances in full each month, indicating a higher proportion of these cardholders revolving balances. This means that 38% of all cardholders have installment repayments pending on their credit cards, with 59% of millennials and 45% of Gen Z consumers falling into this category.

Additionally, while credit cards remain dominant, BNPL options have gained popularity due to their easy access to credit and flexible payment plans beyond the traditional 30-day schedule, which appeals to many consumers.

In terms of BNPL use across demographics, consumers spent an average of $1,692 via BNPL and $1,006 via credit card. Among millennials and Gen Z consumers, the prime demographics for BNPL, the dollar value of BNPL purchases was higher than those made with credit cards, with millennials spending $1,851 via BNPL and $1,485 via credit card, while Gen Z consumers spent $1,230 via BNPL and $1,112 via credit card.

As the study noted, Gen Z consumers primarily use BNPL for practical, smaller purchases, such as clothing, which accounted for 39% of BNPL use among Gen Z consumers, followed by groceries and restaurant purchases. On the other hand, baby boomers and seniors are more likely to use BNPL for big-ticket items, such as furniture purchases.

Credit alternatives such as BNPL are gaining traction among consumers, particularly millennials and Gen Zers. While credit cards still dominate the credit product market, the average amount consumers spend via BNPL is higher than credit card purchases, indicating a preference for using BNPL for larger transactions.

FinTech firm ebankIT, in collaboration with Home Trust, launched a digital platform to offer seamless and integrated user experiences to Home Trust's mortgage clients, according to a Tuesday (Sept. 5) press release announcing the launch.

The new Home Digital experience, powered by ebankIT's omnichannel banking platform, will enable Home Trust to continuously adapt and evolve its digital banking services, ensuring that digitally savvy mortgage clients have access to a user-friendly and secure web and mobile platform to manage their mortgages and accounts anytime and anywhere.

The solution is also aimed at delivering a personalized digital banking experience via all channels including mobile, web, contact center, and back-office services to help clients boost customer satisfaction and engagement.

Commenting on the news, Maria José Gonçalves, COO of ebankIT said that the collaboration with ebankIT has helped to "ensure that customers have the best possible customer-centric, online banking experience," while Mike Henry, EVP Digital and Strategy at Home Trust said they are starting to see"continuing benefits of higher customer engagement whilst also improving efficiency and reducing costs.”

The deal comes at a time when other firms are helping the mortgage sector modernize and digitize its services.

Last month, real estate and mortgage AI platform PropMix debuted the “AI Innovation Garage for Appraisal Management Companies and Mortgage Lenders,” designed to help the industry use generative artificial intelligence (AI) for product modernization and cost reduction.

“Generative AI is disrupting valuation risk assessments and lending decision making, mortgage product customization, customer service, document generation and marketing,” Umesh Harigopal, PropMix’s CEO, said in a news release.

The partnership, offered in partnership with the Innovation Incubator, will also help AMCs and Lenders extend their innovation lab by subscribing to the AI Innovation Garage and to accelerate time to market and continue to be essential in this rapidly changing market,” Harigopal added. 

The use of AI in the world of real estate and mortgages was cited by U.S. regulators earlier this year when they issued a broad warning about the abuse of the technology, PYMNTS reported.

The Consumer Financial Protection Bureau has said that companies cannot allow bias within home valuations and appraisals generated by AI.

Business bankruptcies reportedly experienced a sharp increase in August, with more companies seeking court protection from their creditors.

This rise can be attributed to rising interest rates and various economic headwinds, Bloomberg reported Tuesday (Sept. 5).

Commercial bankruptcies rose by nearly 17% in August compared to July, according to data from Epiq Bankruptcy cited in the report. That marked the 13th consecutive month of year-over-year increases in total bankruptcies, including families and individuals, according to the American Bankruptcy Institute (ABI), per the report.

One measure of bankruptcies, the number of Chapter 11 petitions filed, saw a significant 54% increase year-over-year in August, the report said. However, it is important to note that this number may be inflated due to duplicate filings by large firms that typically file multiple petitions to cover all their various units. Nonetheless, the rise in business failures, particularly among larger firms, is evident, Ed Flynn, a consultant with the American Bankruptcy Institute, said in the report.

Flynn suggested that the increase in bankruptcies can be attributed to rising interest rates, per the report. As the Federal Reserve has raised interest rates to combat inflation over the past year, companies have struggled to repay lower-cost debt as it matures. This has pushed some companies to file for bankruptcy, citing rising rates as one of the contributing factors.

Bloomberg's data shows that U.S. bankruptcy courts recorded six new large filings involving assets of at least $50 million in just one week, with at least 23 big filings occurring in the previous month, the report said.

Gregg Morin, vice president of business development and revenue at Epiq Bankruptcy, said in a press release that announced the firm's findings: "The continued year-over-year increases indicate the anticipated growth of bankruptcy filings is becoming a reality."

In one recent development, it was reported Thursday (Aug. 31) that New York-based eCommerce company Benitago filed for bankruptcy two years after raising $325 million in funding. The Wall Street Journal report attributed the move to Benitago facing challenges as consumer preferences shifted during the later stages of the pandemic and the eCommerce sector experienced a decline as lockdowns ended.

Genesis Global Trading, a U.S.-focused spot crypto trading business, will shut down its over-the-counter trading platform on Sept. 18.

In an email sent to clients, the company stated that all trades must be settled by Sept. 21, and all remaining open accounts will be closed by the end of the day on Sept. 30, CoinDesk reported Tuesday (Sept. 5). Genesis Global Trading is a subsidiary of DCG (Digital Currency Group), which also owns CoinDesk.

GGC International Limited, another trading-focused wing of the company, will continue to offer spot and derivative trading services, according to the report.

Reached for comment by PYMNTS, Genesis emailed: "Genesis has decided to stop offering digital asset spot trading through Genesis Global Trading Inc. (GGT). Spot and derivatives trading services through GGC International Limited remain operational. This decision was made voluntarily and for business reasons. We are working closely with regulatory authorities to coordinate an orderly discontinuation of services."

Genesis Global Trading is one of the Genesis Global Holdco businesses that were not included in the Chapter 11 bankruptcy filing of Genesis Global Holdco and two of its lending business subsidiaries — Genesis Global Capital and Genesis Asia Pacific — in January.

Genesis was the main partner in the Gemini Earn program, where retail investors were to lend out cryptocurrency and get a fixed stream of returns. Gemini halted withdrawals from the program in November 2022 after Genesis said "unprecedented market turmoil" resulted in it lacking the liquidity to cover its redemption requests.

As PYMNTS reported at the time, the company was caught up in the adverse effects of the insolvency of FTX and its affiliates.

In January, both Genesis and Gemini were charged by the Securities and Exchange Commission (SEC) with offering unregistered securities. The SEC's complaint centers on the Gemini Earn program, which the SEC said enabled the two companies to raise billions of dollars worth of crypto assets from hundreds of thousands of investors who weren't provided the necessary information.

Earlier in January, as Genesis was considering filing for bankruptcy, the cryptocurrency lender laid off 30% of its staff across departments as it worked with an investment bank to evaluate its options and to move the business forward.

Matera has launched cloud-native software designed to sit on top of a financial institution's core banking platform, enabling real-time transaction authorizations and balance updates 24/7 for various financial accounts.

The new Digital Twin solution aims to allow banks and credit unions to accelerate their digital transformation while keeping operational costs low, the provider of instant payments, QR code and digital ledger technology said in a Tuesday (Sept. 5) press release.

In today's digital age, financial institutions face the challenge of keeping up with real-time transactions and providing seamless digital experiences to their customers, according to the release. Traditional core banking solutions were not built to handle the volume and complexity of digital transactions and instant payments. However, replacing these legacy systems is not realistic due to the time, cost and risk involved.

Digital Twin offers a simple and low-risk path to the cloud for financial institutions with on-premise technology, the release said. By sitting on top of the existing core banking platform, Digital Twin streamlines digital experiences, supports growing transaction volumes and unifies experiences across various digital channels.

One of the key advantages of Matera's Digital Twin is its ability to handle large transaction volumes and ensure continuous uptime, per the release. In a recent test conducted in collaboration with Avanade and Microsoft, Digital Twin processed over 12,000 transactions per second across 145 million test accounts.

Moreover, Digital Twin provides a secure and flexible platform for financial institutions, according to the press release. It can run on any cloud or database provider, offering built-in redundancy and eliminating the risk of relying on a single provider. This flexibility allows banks to choose the cloud infrastructure that best suits their needs and ensures the availability and reliability of their digital transactions.

Carlos Netto, co-founder and CEO of Matera, said in the release: "It is no longer acceptable for innovation to be hamstrung due to a legacy core. With Digital Twin, banks can move forward."

Matera announced in December 2022 that it was establishing an office in San Francisco to bring its QR code payment solution to the United States. The firm's experience in Brazil with Pix enables it to help customers with a variety of instant payments.

On Aug. 15, Matera acquired artificial intelligence (AI)-powered customer retention firm Cinnecta to let customers of the combined company add value to transactions on Pix by connecting retail banks with other clients offering merchant services.