In aggregate, payment and transaction data defines the unique financial narrative of each customer, providing a wealth of insights about the financial services most needed. FIs that connect the dots between these insights and the development of financial services and products addressing customer needs will win the trust of their customers.
The use cases below illustrate scenarios of how financial institutions can leverage customer data insights to inform their financial services strategies.
Effective financial wellness initiatives address customers’ financial status, behaviors, and attitudes
In 2017, the Stress in America™ Survey revealed that 62% of Americans reported money was a “significant source of stress in their lives”, a statistic indicating that a high percentage of consumers may consider themselves financially unwell. An assessment of “financial wellness” may be unique to each one of us, but can be influenced by a combination of factors including one’s overall satisfaction with their current financial situation, their attitudes, and knowledge of finances, and demonstrated financial behaviors.
Financial wellness programs are more than retirement preparedness, credit repair or debt management. True financial wellness initiatives are broad and deep focusing on the mission to change lives, improve attitudes, affect behaviors and increase knowledge. To develop programs that have the capability to impact lives, financial institutions need to truly understand the current state of their customers’ financial status and their emerging realities. This includes more than just the products they have with the institution, but the products they have with other financial institutions, and their spending patterns for life’s necessities and their discretionary spend. With a deep understanding of their customers and an awareness of their future needs, institutions can deliver financial wellness services and recommendations based on each customer’s unique life stage and financial situation.
In order to understand each individual situation, financial institutions need access to a wealth of data from the transactions and payments customers process on a daily basis. Those transactions and payments define a customer’s priorities and tell each customer’s unique financial story - the held-away products they have with competing institutions, their preferred merchants, and the services they elect to purchase. With the right tools and technology, transactional data can be used by a financial institution to assess its customers’ financial wellness, life stage, and priorities.
Financial institutions should use the customer data they have at hand to develop holistic financial wellness programs including budgeting tools, debt consolidation options, financial education, retirement planning, and more. And once implemented, the success of these programs can be measured through CRM and product team customer touchpoints in a continuous data collection effort.
Stay constantly informed of trending financial technology trends adopted by customers
We’re in an era of abundant information. As portrayed in KPMG's exploration of the multi-dimensional customer, consumers are in a near-constant state of connectivity, with devices playing a central role in their daily routines, and a growing prevalence of voice- and AI-powered assistants in our homes. It’s no wonder that consumers are becoming increasingly more reliant on these devices and technology to make their lives more convenient, especially their financial lives.
Technology doesn’t just make our lives easier, it enables financial institutions to help make our lives easier, and in doing so build stronger connections and longer-lasting relationships. With this opportunity, however, comes the need for institutions to dramatically step up their data and analytics capability to better understand and address consumers’ needs and willingness to embrace new technology.