Can Payroll and Benefits Debits Reveal Businesses Operating out of a Consumer Account?
What we're seeing
In last week’s chart, the data showed that financial institutions have businesses with significant monthly expenditures operating out of consumer accounts. Additional analysis found payroll and benefits behavior within the data sample. Payroll and benefits payments are a few types of transactions that can be used to identify businesses masquerading inside retail accounts.
Overall, 74.6 percent of the businesses found operating out of consumer accounts had payroll payments, averaging $1.6M per year in total. Those accounts had an average of $5.3M in other expenditures.
Accounts that did not have identified payroll payments still have annual expenditures averaging $3.6M per account. This is likely due to a small business having no employees, or may be an individual gig worker. However, it’s also possible that some businesses in this group may be making payroll from an account at another institution.
Takeaway & Call to action for FIs
Businesses operating out of consumer accounts are the ideal candidates for ancillary business banking solutions. Payroll transactions or other benefits can be a point of outreach for a financial institution when trying to convert these retail accounts to business accounts.
Alkami Telemetry Data for this figure was sourced from a panel of 22 financial institutions with more than 2.5 million account holders and over 1.5 billion transactions.
What account holders spend money on every day highlights what’s important to them. That’s why insights built from transaction data are key to executing personalized campaigns that drive revenue.