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The Need is Real: Customers need help with their finances


People don’t want to deal with their finances, it seems. Almost one-third of Americans spend no time managing their personal finances, with over half of surveyed millennials in the same boat.  In fact, less than a quarter of millennials demonstrated basic financial knowledge about financial concepts.  And what customers don’t know about topics like credit card debt, interest rates and overdraft charges end up hurting them.

So how can banks help their customers become better planners and savers?

For starters, banks need to show their customers that they have their best interests at heart. One way of demonstrating their commitment is by making a customer’s disparate data meaningful. Banks are sitting on a goldmine of financial data about their customers – their spending patterns, their debt load, their savings and more. By pulling together customer data and seamlessly processing it, patterns begin to emerge, such as a customer’s weekly coffee and restaurant expenditures. With this kind of enriched data, you can proactively show the customer how the little things add up, and how daily lifestyle choices affect long term goals. It’s this kind of personal recommendations that customers are looking for – advice that fits within their reality.

BBVA’s program “Bconomy” is providing just that, helping their customers achieve financial goals with personalized advice. Customers can set up goals, save toward them and track their progress.  The program analyzes different aspects of a customer’s finances and then makes personalized recommendations based on a customer’s goals. Customers responded enthusiastically to the program from the get go – within its first three weeks, the program signed up 500,000 customers.

The UK-based Metro Bank introduced “Insights”, a service that monitors expenditures and spending patterns in real time and provides customized financial guidance. A customer is alerted to things such as higher than usual expenditures, a subscription that is about to be auto-renewed or a large payment that could trigger an overdraft charge.  By putting the granular spending details into a holistic context, the customer can ultimately make smarter financial choices.

These offerings are based on advanced analytics and data mining technology that provides a 360 view of the customer in real-time. Some banks are using this valuable insight to provide relevant advice and guidance with automated alerts and advice. But not all customers are comfortable with automated or AI-generated advice. A large European study conducted by ING indicates that most people are wary of making financial choices using automated services.

Then there are the instances in a customer’s life when complexity takes over. Perhaps a customer has been laid off and needs a full review of their financial situation. Maybe they need to decide on complex investment products and are feeling intimidated by the array of decisions in front of them. Automated services likely won’t be their first choice for advice. A trusted advisor can navigate these decisions with their client and contribute to their long-term financial health, and maybe even save a customer from making bad decisions. It’s a powerful moment of trust when expertise and experience take centre stage.

The challenge for banks is to find the right balance of automated and human advice and provide it at the moment the customer wants it. It’s no longer enough to provide basic payment and transaction information or a budget and goals dashboard in your mobile app. Banks need to make every conversation and every interaction count. Meaningful experiences that integrate the latest in technology with the best of human advice can put customers in a position to be confident in making financial decisions. And with each of these helpful, consistent interactions, their trust in their bank grows.