Nov 17, 2022

4 Min Read REGISTER NOW TAB Bank in Ogden, Utah, is seeing early success from its bet that younger, tech-savvy consumers would rather get an ownership stake (albeit a small one) in companies like Walmart and Amazon instead of points they can use to spend at those brands. To further this strategy, the bank launched a debit card in August that pays rewards in fractional shares of stock for major brands. Its goal is to launch the product nationwide, but only after it has proven the demand for it in its home markets of Ogden and Salt Lake City. Between February, when TAB unveiled its plans for the account — called TAB Flow — and the product's formal rollout, TAB built a waiting list of about 3,000 individuals who expressed interest in the fractional-share-reward concept the bank calls "spendvesting." During the third quarter, which included TAB Flow's debut, the bank saw its number of deposit accounts holding less than $250,000 jump nearly 12%, to 13,755. Demand deposits rose nearly 7%, to $203.7 million, in the same period. Customers who've opened TAB Flow accounts have proven to be exceptionally engaged, according to Nick Craven, the $1.2 billion-asset TAB's senior vice president of consumer and commercial banking. "We're tracking metrics that show new customers are touching our product four or more times a week, which is just incredible," Craven said. "We're super-optimistic about the data we're gathering and the traction we're getting. … The rewards are fractional but people are watching them build." "Our mission is to create access to financial services. This is a great product to do that,” said John Huntinghouse, vice president of marketing at TAB Bank. Zephyr18 The account is split into two tiers. TAB Flow, the basic level, pays 0.5% rewards when customers shop at six blue-chip brands, Walmart, Amazon, McDonalds, Disney and Starbucks. Consumers are rewarded with fractional shares of whichever company they shopped at. TAB Flow+  charges a $5 monthly fee, but it doubles the per-transaction reward to 1% and offers a wider list of 20 brands eligible for automatic rewards. Tab Flow+  customers also earn the 1% reward for any other spending they do, and can choose up to four of those 20 stocks for the allocation of the rewards from that additional spending. Bumped, the Portland, Oregon-based fintech that is handling stock trades and fractionalizing shares for TAB, reported similarly high levels of engagement from a pilot it conducted prior to TAB Flow's launch. Pilot participants averaged a 19% increase in debit card spending and a 14% increase in transactions after they began receiving fractional-share rewards, according to Amy Dunn, Bumped's chief marketing officer. Since banks receive a portion of the swipe fees consumers pay when they use payment cards, those numbers convinced Bumped, which had been positioning its service as a tool big publicly-traded retailers could leverage to boost brand loyalty, "that there was a bank play here, as well," Dunn said. TAB is the first bank to introduce a stock rewards card through Bumped, but the relationship is not exclusive. "We think of Bumped as a platform any brand or financial institution can build stock rewards on top of," Dunn said.