David Albertazzi
Financial institutions (FIs) have been trying to help consumers take control over their financial matters by providing them access to personal financial management (PFM) capabilities in digital banking. While a little more than two in ten consumers have used PFM, the interest in using it is fading away. Now, FIs in the U.S. are beginning to take the best concepts of PFM and build real-time experiences that engage consumers in understanding their complete financial picture and improving their financial health through virtual financial wellness tools.
The convergence of artificial intelligence, big data, mobile and other emerging digital touch points is also creating a unique opportunity for FIs to help consumers achieve their financial goals by building financial wellness experiences.
To better understand how technology factors in to financial wellness, Aite Group conducted a survey of 5,174 U.S. consumers during Q4 of 2017 who have an account with a U.S.-based credit card, prepaid account or investment account. The survey focused on consumers who are digital banking customers who log into their primary financial institution’s website or mobile site at least a few times a year, or share or have primary responsibility for household finances.
Digital has become the everyday banking channel. FIs are under pressure to meet rising customer demands for better digital experiences. One market trend is that data provides more insight into ways to help consumers improve their financial health. Because of this, banks are confronted with fierce competition.
Consumers’ channel preferences are shifting from the branch and contact center to digital channels – online and mobile. Given the number of interactions in the digital channels, FIs have more opportunities to engage customers in meaningful ways. A market implication is that new and emerging touch points are being introduced, pressuring FIs to find new ways to engage consumers.
Digital experiences need to move beyond interacting with products and help customers more effectively manage their finances. New touch points have created a new data stream that can be used to gain better insights, to better serve consumers and to help consumers meet their financial goals at every stage of the customer life cycle.
Consumers are now confronted with an increasing number of options when choosing a financial institution. FIs are under pressure to build digital experiences that resonate with the customers they serve now and the customers they hope to acquire.
Tiffani Montez
Younger Demographics Want More Virtual Financial Wellness Tools
National banks’ 22-to-34-year-old customers show the greatest interest in using virtual financial wellness tools.
To understand a customer’s interest in getting real-time personalized financial advice, Aite Group asked study participants a series of questions to gauge their interest in improving their financial health through financial wellness tools. Eighty-four percent of 22-to-34-year old and 82 percent of 35-to-49-year-old national bank consumers indicate they are moderately to extremely interested in using virtual financial wellness tools. A little less than two-thirds of national bank consumers 50 years old and older are moderately to extremely interested in using virtual financial wellness tools.
The usage of PFM looks very different by age and financial institution type. Aite Group recommends that FIs should take key learnings from their implementation of PFM to determine how to position personal financial wellness tools to consumers to drive higher utilization.
Interest in the virtual financial wellness tools is driven by age. Across the board, the age brackets that show the most interest in the virtual financial wellness tools are 22-to-34-year-olds and 34-to-49-year-olds. FIs should look at the interest for their FI type to determine how willing their customers or members are to use these tools.
Across all financial institution types, respondents are the most interested in using virtual financial wellness tools to reduce debt, achieve savings goals, track their finances and optimize their financial health. FIs should look at the goals for which their customers or members are the most interested in using the virtual financial wellness tools and the overall priorities of these goals.
Respondents’ willingness to share information with virtual financial wellness tools to get advice varies by age and FI type. Aite Group suggests that FIs should look at customer willingness to share information and also make sure they communicate to their customers or members the value they will get out of sharing their information.
By understanding behavioral and attitudinal factors of consumers, FIs could determine whether those factors could possibly limit the usage of a virtual financial wellness tools. FIs should use the key finding to determine their main obstacle to getting their customers or member to use virtual financial wellness tools.
David Albertazzi and Tiffani Montez are senior analysts on Aite Group’s retail banking and payments team. To learn more about Aite Group’s research coverage of banking technology and retail banking, please contact Aite Group at info@aitegroup.com.
