Money in some form or another has existed for as long as people have had something to exchange – livestock, sacks of wheat, gold and other precious metals. Money has been used as an object of value that could be used for payment for goods and services, or repayment for debts.
Around 2000 BC bankers and banks started to be founded. These were organisations that facilitated the transfer of money between parties, and allowed structured depositing and borrowing, and later on, more complex financial products emerged. It's intriguing to read the history of money and banking. As the world changed, which meant that the needs of individuals, companies and even states changed – and the banking took new forms and came up with new ways to serve those needs. We have Bank of England to thank for permanent issue of notes, the Rotchild's family for international finance, and Inn Keeper Richard Ketley for Building Societies. Disruption to “banking” and “money” if you like, has often come from new emerging needs in society and its people.
Fast forward to today, and many of our financial institutions are stating they are deepening their relationships with customers to better meet their needs. But are they? If you read the RED Associates “Future of Money” report – it sounds like banks may not have paid enough attention to customer needs. Over 80% of respondents said they feel their relationship with their bank is transactional – utility, if you like – with little consideration for their actual needs. But surely, people still trust banks? Well maybe not quite, as 68% of respondents stated that if they won EUR1M in lottery tomorrow, they don’t trust their financial institution for advise how to best invest their money. Throw in Digital disruption and almost 70% of HNWI segment says that they are ready to walk to a competitor who has better digital service proposition.
At Cognizant Snapshot Breakfast we explored the concept of Fast and Slow money, people’s perception to money, relevance and connection - and how financial institutions are and could respond to these.
FAST and SLOW money
Mikkel Rasmussen from RED Associates spoke about the digital divide of what he has coined as FAST and SLOW money. FAST money is your everyday accounts, credit cards and in-moment payments. This is the money we have digitized and made a utility out of. But what people are struggling with, is the SLOW money - long term savings, assets, pensions, insurances. And here is where customers point to banks and say how little help they get to understand their SLOW money – and how it could be made relevant for them in their day to day lives. People have fundamental disconnect of how their habits and behaviors in now (aka FAST money) is related to their long term financial future and well being (SLOW money). Mikkel argued that key for banks is to help people connect the dots between Fast and slow money, and give customers the tools to be co-producers of their financial futures that are related o their individual goals.
PURPOSE of Money
Future of Money research talks about the disconnect between how people perceive money and how banks think about it. People give money a purpose, and their behavior is related to it – e.g. the way how you behave and what you need to manage your ‘”Purposeful” money vs your “Experimental” money is very different. However, Banks have products which have very similar service and offer models regardless of this divide in people’s minds.
Per Klitgård from Danica Pension shared quite shocking statistics that 50% of Danish people are not saving enough for their pension. Given future financial security was ranked as the most stressful thing in people’s lives in the research, it was great to hear the commitment from Per to invest into a service to encourage people to save for their future, and to make pension as a continuous service offering value for people’s “Purposeful” money needs. “We really didn’t know our customers’ needs but now having worked with RED Associates, we are on a journey to change that”– I really take my hat off to this brave CEO who is leading the way to drive Purposeful services for his customers.
Relevance, Connection and Trust
The third theme that emerged is the way we can look for relevance and connection to customer’s emotions, and via using them build services that encourage changes in customers behavioral patterns. Henrik Rosvall from Dreams gave compelling examples of how using as ‘obvious’ motivator as our dreams (e.g. I want to go on holiday) could be used to drive customers to save more – something Dream’s business idea is built upon (and very successfully at that!). Christian Visti’s from NewBanking also argued that services that support customer’s desire for security and privacy could be leveraged for making your customer connection relevant, and increase trust.
I would like to thank our speakers Per Klitgård (CEO Danica Pension), Christian Visti Larsen (NewBanking), Henrik Rosvall (Founder and Director, Dreams) and Mikkel Rasmussen (ReD Associates) who brought forward their differentiating, but surprisingly aligned views to this topic.
To apply this into practice, here is a short to do list which can get you going straight away:
We have woven the Fast and Slow money insights to our Digital Business DNA, and have compiled a list of potential user stories and solution options together. However, we recognize the differences in banks unique value propositions, service and product offerings and target client markets – so we have a framework in place to help you with customer research, assessment accelerators, digital strategy and road map building - and lean startup MVP model to pilot your “Fast and Slow money” ideas in the market. Goal of this all is to help you build truly deeper engagement with your customer that deliver business outcomes.
Do feel free to reach out in case you have any questions on the topic! In case you want to dive deeper and better understand and take the help of our jump starters, please consider arranging a Future of Money workshop with us to get moving ahead.
Digital Partner - Nordics, Cognizant Digital Business