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October 19, 2017
Bob Legters | Chief Product Officer, FIS Payments Division
Do you think banks will realize how important their role is in revamping online charitable donations?
Fundraisers for recent natural disasters highlight the millions of dollars people pledge to charity every day. But how safe is the cash, and how secure are the payment card details? Digital giving remains riddled with security problems – the result is that loss of trust actually has led to lower than expected volumes. Streamlining the process and improving security has the potential to benefit everyone involved.
Online donations have been a reality for more than a decade. The process to do so, however, has changed very little: donors press a link on a website, they enter the charity’s own website and then they register and enter their card information. It’s a laborious process and one that does not provide a guarantee of safety. This is particularly true for smaller charities that may not be able to afford the highest security like larger charity organizations.
Loyalty programs represent another way for people to donate. Instead of paying in cash, donors can convert points into money and donate that. It actually simplifies giving for many people, particularly those with tighter budgets for whom donating cash might be problematic. However, loyalty donations don’t provide tax exemptions and the public’s response has been underwhelming.
If all those issues weren’t enough, many people consider charitable giving a community thing, meaning they prefer to donate to a group that will help in their community. Considering that smaller fundraising groups often face the largest hurdles when it comes to safety and that smaller charities are often harder to find, this leaves people unsure of where or whether to donate.
What if the entire process of making a charitable donation was controlled by a bank? To donate, a consumer selects their preferred charity and donation amount, and the process is complete. The bank site then becomes the charity portal, requiring no forms or card details!
Of course, banks cannot be expected to maintain close partnerships with large numbers of charities. However, they can collaborate with charity aggregators that link directly to thousands of charities worldwide. Bank customers could simply search for their preferred charity or receive suggested charities based on search criteria. Then, they simply click a button and their donation is made without inputting unnecessary information or exposing themselves to additional risk.
Banks also can lead the way by reinvigorating loyalty giving through their own portals. Being able to convert loyalty points earned on cards into digital giving allows those with lower resources to contribute (even though there is no tax credit). A businessman may not have a spare $1,000 to give, but he may have 100,000 air miles that are about to expire. Making it easy to donate will bring more donations to the table.
The sentiment of giving has become a strong practice among millennials so it is important to factor in their needs when creating new ways to increase donations. A digital giving strategy that positions the bank at the center of this virtuous relationship is key for all parties – donors feel more confident within a bank’s online environment, charities receive more visibility and banks see a growth in transaction volumes. It is a win-win!
By implementing a banking portal that incorporates a charity aggregator that links into the charities themselves, the entire process can be simplified. Consequently, a fully integrated solution, where payments are made electronically, greatly reduces costs. That means more money going towards good causes. A portal also means consumers don’t have to search for the websites of their preferred charities and payments to multiple causes can be made from their familiar banking site or smartphone app with just one click.
Going a step further, banks can add an element of gamification to the mix to cater to millennials. By leveraging people’s natural competitiveness, plus their love of showing positive behavior, banks can publish leaderboards of the most generous donors. Maintaining easily accessible histories encourages consumers to donate more frequently. The banks can also reward customers by offering prizes on different donation thresholds.
Digitizing the charitable giving arena is gaining more traction, and financial institutions arecentral to its growth. Becoming the keystone for good causes offers banks multiple opportunities to increase their underlying business, position themselves at the heart of their community and benefit from the positive conversations among their customers. It is good to be part of a group that is giving – banks need to recognize this, acknowledge it and reward their customers for doing so.
By giving consumers a choice of which payment method they want to use and making the process simple, customers will be more likely to keep their bank top-of-wallet. Banks have a vital role to play in ensuring digital donations are safe, secure, quick, and convenient – especially in a world in which technology is always advancing and changing.
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