Money matters cause a lot of stress to people, but are financial service providers really addressing their issues? What strategies and innovations are needed when customer relationships move out from the office and into the mobile? Welcome to a turbulent era within banking, an era with great opportunities and where digital can be a way to enhance the human perspective.
Can saving money for the future be fun? It has to be, or we miss out on the younger generation used to quick rewards, according to Henrik Rosvall, CEO at Dreams. He was one of the speakers at the fully-booked Cognizant Snapshot Breakfast on Fast Money vs. Slow Money in Copenhagen. Dreams is a fintech company based in Stockholm that designs financial services based on the brain’s cognition.
Launched a couple of months ago, their application now has 80,000 users and about 130 million transactions have been done using Dreams’ motivating and coaching approach to saving money. According to Henrik Rosvall, new financial services aren’t a tech issue at all; it’s about getting to know the people you are delivering to. How to achieve that mission? Start with asking “Why?”, set up a diverse innovation team, and make money matter.
People’s relationship to money
But why is it so difficult to grasp the long-term money matters? While there are about 600 new reports released each year about the future of banking, almost no one has explored people’s relationship to the money itself. Until now. ReD Associates let anthropologists stay with people to get under their skin when it comes to emotions, habits, and needs linked to money. The discovery? It’s a very complex issue; having 25 different accounts, 14 credit cards, and 6 insurance policies is a normal thing.
According to Mikkel Rasmussen, Senior Partner at ReD Associates, the financial ecosystem evolves accidently over the years, and thus causes great stress: 35 % of the over 3,000 people surveyed state that financial or money challenges are their biggest source of stress in life.
Huge commercial potential
The study, The Future of Money, boils down eight different types of money into two overall mindsets: fast money, which is money in the now and mostly digital, and slow money, which is money in the future (like insurance, mortgages, and pensions) and still paper based. Strange enough, there are almost no services for the consumer’s slow and deeper money needs. For players that manage to bridge this gap, there is a huge commercial potential; ReD estimates a revenue uplift of 40% a year for financial service providers.
175 years – and catching up
What about the historic legacy of big banking; is it even possible to re-direct the muscles and start addressing slow money needs? Per Klitgård, CEO at Danica Pension, is trying to do just that. Danica’s deep dive into customer needs, showed that the company had to be more proactive, relevant, and more precise in its recommendations.
The findings constituted a good starting point for Danica’s new event-based campaign targeting customers in connection to important life events such as divorces. The company is also working on a single platform for all the services, to make it easier for customers to deal with slow money matters step by step.
Blockchain becomes key
New technologies will continue to transform financial services. Christian Visti Larsen heads the startup NewBanking, and believes that Blockchain technology will play a major role. How? Because access to and management of digital identity can become the future key to customers; when customers are in charge of their own data, and allow financial service companies to access it, new opportunities arise. It’s safe, GDPR compliant, shortens the on-boarding process – and makes it easier to engage with slow money matters to a lower cost.
The emerging technologies pave the way for new players, specialized in engaging with clients or in another specific part of the financial procedure. Will the big companies lose market share to startups? It seems like a variety of providers will co-exist, and new partnerships will arise – but the customer relationship will remain in focus.