The banking industry embraces financial well-being to retain customers
Australia’s banking industry is fully embracing digital financial well-being as a way to acquire and retain customers, ensuring banks stay grounded in consumers’ day-to-day financial decisions, new data from Forrester Consulting commissioned shows. through the Backbase banking platform.
The to study adds that there is now a demand for digital financial well-being as neobanks become mainstream. These initiatives will be at the heart of their digital offer.
Rear base Asia-Pacific Regional Vice President Iman Ghodosi says banks are learning from their mistakes, but their reaction is still slow to the boom in ‘buy now, pay later’: ‘traditional banks have been caught off guard with the recent increase in buy now, pay later. It seems they don’t want to repeat that mistake with neobanks and their mobile-centric personal money management tools that are already adding value to the lives of many Australians.
âThe old institutions are now working to build consumer confidence and provide services such as spending analysis, budgeting, creating savings goals and improving credit scores with these tools. Â», Explains Ghodosi. âWhile benefiting from the wealth of customer data and information they can offer. “
Of ANZ Retail Bank business decision makers surveyed for the report, 92% said their financial institution is actively planning or developing its financial wellness and money management tools, while 60% said that it was a key priority.
The fintech wolves are at the door
Ghodosi says neobanks, fintechs and disruptors are waiting to take market share. He also sees the next six months as an inflection point in space.
âDigital technologies can provide an aggregate view, as well as alerts and information on multiple accounts, etc. Frollo, Humanity, Wisr, and my prosperity are all gaining ground and market share, âhe says.
âPeople want the same high level of customer focus and flexibility with the financial services they subscribe to, like what Netflix and Spotify provide. They want access to their personal finances anytime, anywhere, through any channel, and tools to manage them; traditional banks are being left behind and they know it, âhe explains.
He says banks have now entered the âera of the engagement banking,â an evolution that emphasizes a unified platform approach to banking services.
The priority, he says, is “to completely reorganize the bank around the customer, away from siled technology investments.”
Ghodosi says, âAt Backbase, we help banks adopt and build modern, cloud-native banking platforms to keep pace with changing consumer demands, gain a 360-degree view of banking behaviors and increase their market share in all business sectors. We focus on customers before products and create digital money management tools that match individual needs.
Unfortunately for Australian banks, the main challenges that stand in their way include a lack of understanding of their clients’ needs and outcomes, a lack of digital literacy within the organization, outdated technology, and limiting organizational silos. .
âThere is also a lack of understanding within the legacy institutions about who holds the budget for these types of initiatives; is it considered a customer experience? Is it a business strategy? Or is it marketing? Questions from Ghodosi. “When in fact it’s three and more.”
More than just a customer loyalty strategy
Through digital financial wellness initiatives, banks can offer more care and protection to their customers than they have ever had the opportunity to before, the study noted.
This pays dividends for the decreasing trust of customers in banks, and also benefits them and the institution.
72% of retail banking business decision makers surveyed mentioned that preventing exploitation of vulnerable and elderly customers was a priority, and 60% said that providing secure shared financial management solutions for vulnerable customers, proxies and caregivers was a priority.
54% said that proactively helping clients with mental health issues or financial distress was part of their plans and 74% used financial wellness to encourage clients to adopt better financial habits.
Other more specific tools were also mentioned, such as improving customer credit scores (80%), providing personalized recommendations for financial products (74%) and advanced salary and income smoothing, 64% of decision makers mentioning it was something their company was planning. .
“Comm Bank and ANZ are making progress in this space and have the technological capabilities to close the lead on dynamic and agile neobanks. As technology continues to redefine financial services, consumer expectations and demand fuel the sense of urgency for financial service providers to capitalize on the opportunity for financial well-being, âconcludes Ghodosi.
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