- Plum is launching a new cash-back feature to Plum Pro subsribcers, which will bolster its premium offering amid strong customer growth.
- Plum should also prioritize strengthening its premium offering with educational tools to fuel further customer acquisition in the UK.
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The UK-based personal finance management (PFM) fintech will launch a new feature enabling premium Plum Pro subscribers to earn cash-back rewards of up to 11% when shopping online with a host of retailers, per AltFi.
Plum links its users’ bank accounts to the Plum app using APIs and then leverages AI to analyze transactional data, ascertain the amount that a user can afford to save, and move money into a savings account via round-ups. Plum also offers savings pots, easy-access savings accounts with 0.60% AER, and individual savings accounts (ISAs).
Adding cash-back rewards will further entice existing and new users to sign up to the premium subscription tiers to drive revenue gains. Plum has more than doubled its customer base in the space of a year, growing its UK users to over 1 million as of July. What’s more, a quarter of new users are opting to pay monthly for one of Plum’s premium accounts: Plum Plus and Plum Pro, which cost £1 ($1.32) and £2.99 ($3.94) respectively, per AltFi. Building out the range of features on its premium accounts might attract a greater proportion of new customers to pay for its services, which will increase revenues.
Plum should now prioritize strengthening its premium offering with educational tools to fuel further customer acquisition in the UK, rather than look to expand internationally. Plum’s automated PFM features boast a high level of digital maturity, yet it could benefit from developing its financial education capabilities.
Providing interactive tools for users to teach them about concepts like investing, for example, would increase engagement and create a stickier value proposition. It would also help Plum stand out in the crowded UK PFM market, as competitors like Emma and Cleo also don’t offer financial educational tools. And like the new cash-back feature, educational tools would make its premium accounts more robust and appealing to new and existing users, driving further revenue gains. Plum could use the funds it raised in July to this end and strengthen its position in existing markets — likely a less risky venture in the current economic environment than entering a new market like France or Spain, in which the fintech has expressed strong interest.
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