Using Data to Drive Consumer Financial Wellness
May 17, 2023 | 2 min read
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In our Ultimate Guide to the Future of Banking, we found that 86% of U.S. consumers interact more frequently with their financial institution digitally rather than in person. In addition, more than 80% of consumers use mobile banking at least once a week, while only 16% do the same with bank branches. These stats highlight a long-term trend in financial services: Consumers increasingly demand premium digital experiences.
Whether you work for a bank, a credit union, or a fintech company, your task is to provide these premium experiences.
To do this well, you must first build a culture of data — a culture where team members across your company know the basics of data literacy and have the tools they need to put your data to use.
Why is this transformation so urgent?
From chatbots to voice-assisted devices to automated money management, the technology of the future relies on clean, categorized, and augmented data. After all, what good is a chatbot if the data it pulls is incomprehensible to the end user? How can a voice-assisted device serve up useful answers if the data behind it is in shambles? The best way to prepare for the future is to lay a foundation of clean data today.
It’s simple: If your customers can only view the accounts they have with you in your app, they’ll never consider you their primary financial hub. Why? By definition, being the financial hub for your customers requires them to see all their data in one place.
If you’re not the primary financial hub, your competitors will be. Your customers will sign into your competitors’ apps instead of yours, and you won’t be on the home screen of your customers’ smartphones. Once you lose that position, your relationship with those customers hangs by a thread. After all, they can get the information you provide them in your competitors app and therefore no longer need to sign into yours.
When your customers add all their external accounts in your app, you have their complete financial picture. Now you can see the number of users who have an internal or external mortgage, an internal or external car loan, an internal or external savings account, etc. It’s the simplest way to truly know the financial lives of your end users and get a sense for your user base.
Pulling again from our Ultimate Guide to the Future of Banking, 94% of consumers say that if their financial app could offer them a better deal on a product (e.g., mortgage, auto loan) than they currently have, they would want to know.
Ask yourself how you’re doing on this front. Can you see whether a customer’s mortgage rate with your competitor is too high? Can you see whether they’re paying too much for a car loan? The right foundation of data gives you the ability to use this data to make hyper-personalized offers and win business directly from your competitors. Those who don’t have this ability will find they’re on the losing end of this situation.
Without laying the right foundation of data, you can’t offer your customers true financial guidance. For instance, if your users haven’t aggregated all their retirement accounts, your suggestions about how to best prepare for retirement will almost certainly be misguided. By contrast, if you’ve built a foundation of aggregated and enhanced data, you can leverage automated algorithms to guide customers step by step away from danger. These small nudges lead users to true financial strength. You’ll win their long-term loyalty in the process.
Whether you want to prepare for the future of technology, become your users’ primary financial hub, know essential details about your user base, give your customers hyper-personalized offers, or guide them toward financial strength — everything rests on your ability to lay the right foundation of data.
Want to learn more? Check out the 25+ page Ultimate Guide to the Future of Banking, which is full of original research that will give you the upperhand in laying the right foundation.
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