Digitalization and rising consumer expectations serve to accelerate banks’ adoption of new financial wellness offerings. For most institutions, competing on products and services is no longer a sustainable strategy. The financial institutions that will win lasting consumer relationships will be the ones investing digital experiences that allow consumers to take control of their finances and learn how to meet their financial goals.

Bank customers are certainly looking for more personal engagement in this area. According to the Aite Group, some three-fourths of 22 to 49-year-olds say they would like to have their own virtual financial wellness coach. Many customers wish that banks were more proactive like other types of service providers as demonstrated in this finding from the Boston Consulting Group.

Building from trusted relationships

Trust is one of the key drivers in providing effective financial wellness insights. A key element of financial wellness is that it has got to be trusted advice that the consumer feels is in their best interest. Banking relationships have always been trusted relationships. An extension of building that trust is looking out for the customer, helping to build the right habits and ensuring they are on the right path from a financial point of view.

As financial institutions look to grow their digital relationships to create an engaging customer experience, they should consider the following: if the bank is able to provide the right type of guidance and meaningful interactions, that relationship becomes enduring and that is where one also realizes the benefit comes back to the bank.

Keys to an effective financial wellness strategy

Financial wellness and personalization go hand in hand. Banks need to determine the level of personalization they want to deliver to consumers while evaluating the technology that can enable it. For example, does the bank need to offer contactless payment capabilities to address the overall lifestyle wellness of their customer base? Or what level of fraud warnings will ensure a customer feels secure within their banking relationship?

A bank’s core processing system of record should contain a vast amount of – and links to – the data needed for the personalized experience key to financial wellness programs. Bankers should understand the available data and the range of financial wellness tools to best inform and educate their customers.

As a component of that education process, banks can offer financial literacy education to inform (potential) customers on the value of banking products and services while laying the groundwork for financial wellness programs.

Financial wellness deliverables

Achieving the goal of personalization requires technology to support it comprehensively. It is mandatory there is real time integration to transactional data as immediacy is critical. Along with real-time information, artificial intelligence is needed that can process the past and also look forward to predict and anticipate the future based on historical patterns and patterns from similar users.

Financial wellness programs should:

• Leverage data. Inform customers on what is happening. This includes transaction data analysis as well as categorization and contextualization of relevant data.
• Offer insights. Deliver customers information on important activity such as an unexpected payment, higher than usual spending or an insufficient balance.
• Provide advice. Suggest to customers what they should do in given situations like using a particular card, transferring money or doing more to save.
• Enable action. Help strengthen customers’ financial wellbeing to achieve specific goals for spending and savings.

The time is right

Advances in artificial intelligence coupled with a rise in customers’ expectations for personalization ensure financial wellness programs are going to rapidly expand. And the market is ripe for these solutions. More than two in five consumers (44%) who described themselves as living paycheck to paycheck were extremely interested in becoming more financial literate according to a survey from PYMNTS.com and Unifund.

Customer engagement encompasses contactless payments, fraud protection, personalized data analytics and now financial wellness programs. Bankers need to challenge their technology partners to help them extend digital relationships based on their digital worlds. Extend your role as your customers trusted provider by offering financial wellness programs that can expand into lifestyle wellness. You can create relationships that transcend beyond just processing banking transactions.