Personalized digital banking is on the rise

Fintech companies are improving incumbent processes and prompting choice in financial services to proliferate. Large banks are seeking to diversify their offerings to retain customers by introducing personalized and digital solutions. This period of change is giving customers more freedom to choose which financial institution they use. Open banking will only increase this freedom.

American bank Umpqua announced yesterday the launch of ‘BFF,’ an app that is your ‘Best Financial Friend.’ This is part of Umpqua’s human and digital strategy, where the personalized customer experience of old-style banking is fused with technology. The mobile app connects customers to a financial expert who is their personal financial expert.

Another personalized digital banking development yesterday saw Spanish bank Ibercaja team up with UK data analytics firm Meniga. Meninga will help Ibercaja introduce real time data processing to improve personal finance solutions. Data analytics and predictive models will be important for banks to improve services, especially the time in which loan applications, for example, can be processed. Meniga and Ibercaja will also work together to improve digital customer engagement.

The changing face of banks

Another payment method has launched in Facebook Messenger. With PayPal, it is possible for a seller to prepare an invoice within the Messenger App extension and send it to the buyer for completion with PayPal One Touch. This development builds on the P2P payments capability in Messenger announced last month.

Challenger bank Monzo is completely mobile and digital. It is also strongly backed by American investors. Yesterday it was revealed that Instagram founder Kevin Systrom is an investor. It is no secret that Monzo is looking to the US market for expansion. CEO and co-founder Tom Blomfield has criticized American banks, saying that there is space in the market for a challenger like Monzo. He also said they preferred the US over expansion in Europe due to smaller differences in banking culture. Europe is more fragmented and less similar to the UK, according to Blomfield.

Change in banking is mostly due to digitisation. In Europe, the current wave of accelerated change is linked to the PSD2. The changing face of banking wll only continue to develop in the coming months.