New study: 5 actions to meet customers’ money challenges

In the wake of the fintech threat and other digital disruptions, financial services executives are thinking long and hard about how to deepen their customer relationships. The problem is, many don’t understand their customers’ relationship with money — and neither do consumers, themselves. In fact, many are often unaware of why they act how they do with their money.

Given how much the financial services industry plans to spend on digital (estimated at more than $310 billion annually by 2020), it’s crucial that executives better understand where to focus their investments to meet their acquisition, retention and revenue goals. In conjunction with our partner ReD Associates, we’ve uncovered new insights into just that by studying people in their real environments — and under­standing how they make sense of money, invest­ments, pensions, savings, credit and wealth preservation.

Key findings from the study indicates that there’s a big difference between how people feel about “fast” (daily and short-term spending) vs. “slow” (pensions, insurance, investments, etc.) money. The study also indicates that financial institutions are missing the “slow-money” boat. What to do then? We have identified five actions that financial institutions can take to meet the slow-money challenge:

1. Activate data to recognize the customer
   Build a system of recognition that consolidates trans­actional, behavioral, financial and socio-demo­graphic data into one view of the customer that is shared, remembered and used at every touchpoint.
2. Build predictive models for financial key moments
   Understand when customers are about to experience life events with major financial ramifications. Identify ways to be relevant not only for life events them­selves but also to help consumers prepare for them.
3. Release the power of digital learning
   Motivate customers to develop skills and sensibilities in a way that fits their capabilities and situational needs. Integrate guidance and data interpretation into the front end of existing digital platforms and provide advice at the moment customers make a financial decision.
4. Digitize financial advice
   Turn your expertise into offer­ings that guide customers to healthier financial behaviors and interpret what their financial data concretely means for their situation. Provide meaningful points of comparison to help customers understand whether they are finan­cially on track.
5. Organize around the customer
   Serve up a shared point of view on what matters most to customers, and surface data that resides across business units. Evaluate performance based on the financial well-being of the customer rather than product or compa­ny satisfaction.

Today, the biggest challenge for financial services organizations is determining how digital can support the marriage of people’s fast- and slow-money challenges: giving customers convenience when it comes to their fast money, and meaningful guidance and integration when it comes to their slow money. Doing so will determine leaders vs. laggards in the digital future.