What are Corporate Credit Cards? – Different Types of Cards
February 12, 2025
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Money market instruments are considered to be very low-risk investments. This is because the money market as an asset class is considered to have a considerably low-risk profile as compared to other asset classes such as equity and debt. The main reason for the low-risk profile is because money market instruments consist of a large […]
Almost every start-up firm tries to increase its sales. However, convincing more customers can be a very difficult task. It is common for start-up companies to have significant marketing budgets. However, most of the budget is utilized for direct marketing. There are very few start-up companies that believe that public relations can help them achieve […]
In the previous articles, we have already read about how banks are the main pillars of the financial system. It is obvious that since banks are so important to the economy as a whole, the government must create a system to protect these banks from collapsing in case a negative economic event occurs. Governments all […]
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In the previous articles, we have learned about what subscription-based banking is. We also know the various advantages that this revenue model brings for banks as well as for corporate customers. However, there are several commercial banking experts who believe that the subscription banking model also has its own fair share of problems. Hence, in order to have a well-rounded opinion on the topic, it is important to also be aware of the various shortcomings of subscription-based banking.
In this article, we will have a closer look at some of the disadvantages which are commonly associated with subscription-based banking.
Here too, corporate customers are forced to subscribe to several of the bank’s services at one go when they decide to upgrade. As a result, many corporate customers are hesitant to upgrade from the freemium model. The conversion rates from the free to the premium subscription remain quite low.
Therefore, it often becomes difficult to convince customers to settle for an off-the-shelf product bundle instead of a customized bouquet of services. Many commercial banks have introduced varying degrees of personalization in the subscription-based model. However, it goes against the basic principle of having a few pre-determined subscriptions which the user gets to choose from.
Commercial banks have to be on a constant course of self-improvement if they adopt this revenue model. However, having the need to continuously innovate may not necessarily be a bad thing.
The bottom line is that there are definitely many advantages to implementing a subscription-based revenue model. However, commercial banks also face several disadvantages in doing the same. Hence, the transition from traditional banking to subscription-based commercial banking needs to be well thought out after weighing all the pros and cons.
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