Most consumers use banks for traditional services like savings, checking accounts, and loans. Most banks offer similar services, with hardly any differentiation. This has resulted in a huge untapped opportunity for banks to offer more personalized services to customers. These services address their needs and aspirations, especially focusing on helping their customer with their overall financial wellbeing.
Financial stress is one of the major causes of emotional, as well as physical stress. Money worries are real across a broad spectrum of society and the inability to manage finances and make sound financial decisions can negatively impact physical health. Studies have shown that financial stress also leads to loss in productivity and social engagement, which in turn can make financial stress even worse, creating a feedback loop.
Financial wellbeing is not just about saving and investing money or having access to information on the best rates on loans to make big ticket purchases like buying a home or a car. Rather, financial wellbeing is about developing the ability to make better financial decisions daily, decisions that are well-informed and sound. This cannot be accomplished by research on as needed basis, but by ongoing education and constant reinforcement. This is a growing gap where banks can play a big role, offering education and guidance on a consistent basis.
Financial Technology (FinTech) is growing fast and offers many digital tools that banks can leverage to deliver on their customer’s expectations to have better confidence in their ability to make financial decisions. It is not just about deploying technology – e.g., virtual tellers in banks or mobile banking services – but empowering bank associates to use technology to deliver more personalized services to each customer. Whether it is basic services like opening an account, to educating them on financial principles and banking basics or long-term financial roadmaps to help them make better decisions and developing a long-term relationship with customers.
These services can drive long-term loyalty for customers. With only basic traditional banking services there are no switching costs for customer, but if they have developed an ongoing relationship with a bank associate who acts like their financial coach, they are less likely to switch banks.
Digital technology can be integrated into consumer interactions and associates’ daily tasks. Most of the simple customer activities can be moved to assisted or self-service formats. Artificial Intelligence can be used to deliver more personalized and contextual services that are tailored to customer’s needs.
The data is already there for technology to use it. So, a well thought out data strategy will play an essential role as banks begin to take this approach. Banks already have an overwhelming amount of data on their customers, so it is not about just collecting more data, but about deciding what data they need and how to effectively leverage that data. A thorough approach on developing the right technology platform to enable their associates to help their customer make sound financial decisions will be paramount in the digitally transformed world that we are now living in.
AUTHOR
Shailesh Chaudhry
GM, Consumer Industries, Networking and Edge computing Group, Intel
Shailesh Chaudhry leads a team that is responsible for identify and solving some of the most complex challenges in Retail, Banking, Hospitality and Entertainment Industry and enable solutions that are impactful and meaningful. His team works very closely with customers and partners and takes a human centered approach to delivering innovative IOT and edge solutions and developing an eco-system of partners to scale those solution into global markets.
