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  1. Analysis
July 27, 2022

Railsr: enabling any brand to embed financial experience into the customer journey

Rewards-as-a-Service is Railsr’s first milestone since its renaming and repositioning towards its core embedded finance experiences proposition

By Douglas Blakey

Railsr is on a mission to become the AWS equivalent of the financial layer of the internet. And now, following its re-brand to Railsr from Railsbank, it is launching its Rewards-as-a-service. Stuart Gregory, Chief Product Officer at Railsr tells Douglas Blakey that the new Rewards-as-a-Service product will enable brands to build their own branded rewards programmes.

Railsr rolled out Rewards-as-a-Service in June. It marks the firm’s first milestone since its rebrand and repositioning towards its core embedded finance experiences offer. Specifically, by integrating rewards into its existing card, banking and wallet products, Railsr offers a one-stop-shop solution to brands wanting to increase customer loyalty and engagement through embedded finance experiences. 

Ensuring that the financial experience can generate loyalty

Stuart Gregory, Chief Product Officer at Railsr, tells RBI: “We’ve moved at pace to build the solution to meet the demand from brands, particularly retailers and sports clubs, who are under pressure to deepen their customer/ fan relationships. We’re increasingly helping brands to launch their own debit or credit cards, but to drive usage of those among customers they need to incentivise them through an attractive rewards programme. That’s why the rollout of the rewards offer is so important to ensure that the financial experience generates that all-important loyalty.”

Railsr recent research has shown that only 35% of Brits are satisfied with the loyalty rewards they get from their bank. Such a low level of current customer satisfaction with modest or non-existent UK bank loyalty programmes comes as no surprise. Moreover, it highlights the big opportunity for brands to deliver a better experience.

Rewards-as-a-service launches in the US, global roll out to follow

Gregory adds:” For example, we found that 52% of 18-24-year-olds are interested in a credit card that would actively support sustainability and the environment with every purchase, and 48% would be interested in a credit card that automatically donates cashback to charity. This highlights how consumers are seeking out these alternative rewards that they truly value compared to traditional cashback.”

One immediate challenge, certainly in the UK, will be to persuade incumbent banks to commit budget to a compelling rewards or loyalty programme. Looking back over past RBI annual global awards, winning rewards or loyalty programmes have been based in the US or Canada or Asia Pac. For example, one will search in vain for genuinely innovative and compelling UK-based bank rewards programmes linked to current accounts.

Initially, Railsr is launching the rewards proposition in the US. The offering will be rolled out to customers globally in the coming months. In the US specifically, Railsr is interested in the burgeoning fan economy, including universities, sports and airlines, and working within that sector with its Credit-card-as-a-Service and Rewards-as-a-Service offerings. “The passion and loyalty we see in the US fan economy is second to none and so we see great synergies.”

Railsbank rebrands as Railsr

The Railsbank rebrand started back in November 2021 with the launch of a new industry category: embedded finance experiences. Gregory says that the category represents the next phase of growth for embedded finance, moving away from embedding basic finance products to deeper financial experiences that are seamlessly part of a brand’s customer journey. It’s a market he estimates to be worth around $800bn of revenue globally.

“Then in June this year, we decided to drop the ‘bank’ from our name as we felt it put us in the past. Crucially, our product set also goes beyond banking so, we repositioned towards our core embedded finance experiences offer. Our mission is to enable brands to leverage finance as a strategic tool to build customer relationships, relevance and revenue.

“In our fast-moving world of amazing customer experiences, the finance industry has failed to evolve. But we believe the future of consumer finance will be delivered by the brands we love, whether that be your favourite retailer, sports club or car dealership. Our rebrand signifies that we’re ready to help these brands make finance a phenomenal experience.”

Railsr mantra

At the heart of the Railsr proposition is the mantra that consumer behaviour drives everything. Consumers want frictionless, fun experiences, not finance. The following example has been quoted by many a Railsbank (or Railsr) executive but remains compelling. “People do not dream of car loans. Instead, they want an amazing car buying experience that just happens to have a loan embedded.”

Railsr: the next UK unicorn?

Railsbank could never be accused of lacking ambition or of under-estimating its importance in terms of innovation and disruption. For example, co-founder and CEO Nigel Verdon has talked of Railsbank transforming financial services in the same way that Apple disrupted the music sector via iTunes. He has also talked of Railsr ambitions to be the AWS of the financial layer of the internet. So when AWS began, everyone could launch a server or launch their business technology on a credit card in under 30 minutes. Prior to that, Verdon references a timescale of up to six months and the need for significant funding to set up an operational data centre. Railsr’ commitment to customers and to the market is to be the ‘go-to’ place to create embedded finance experiences.

And it is a vision that finds favour with its backers. If media reports from Q1 are accurate, Railsr is well placed to become the latest UK fintech unicorn. Specifically, Sky reported that the firm has hired the US-based investment bank FT Partners to raise a new funding round that will value it at more than $1bn.

Rails priorities

Pre-Railsr, firms had to do lots of integrations, maybe involving three to nine separate commercial agreements. So firms had to deal with disparate pricing schedules that were often complex. In other words, it was difficult to understand the real economics. With Railsr, as Verdon explains here, it is one integration, one contract and a single side of A4 paper of commercials. In brief, Railsr is on a mission to accelerate the ability to embed financial experience into the client’s existing customer journey.

For Gregory, the former MD of Wise Business and Wise Platform, where he built, launched and scaled their business propositions to represent 20% of its £9bn listing, the immediate priorities are to continue to support Railsr’s growth to build expertise in its key business development areas, the sports industry. The firm recently appointed former England rugby captain and current leadership mentor at England Rugby Union, Will Carling, to an advisory role within the partnership team. Another notable hire is that of Jon Hall, former MD then CCO and deputy CEO of Masthaven as a senior adviser.

Gregory concludes: “The rest is business as usual as we navigate the economic downturn with the rest of the tech and fintech sector. Cash burn, capital efficiency, existing customers and an operationally excellent product are all top of mind.”

Stuart Gregory, Chief Product Officer at Railsr

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