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Digital banking 2022: the way to customers’ hearts is through data

Digital banking has become functionally correct but emotionally devoid. Banks have to find a way to put humanity back into banking,” Accenture analysts explain in a newly published industry trends report. Seven out of ten banking customers say they would welcome a digital experience that includes human advice and, according to a 2020 study by CSFI, 80% think trust is key in their relationships with their banks.

While technology has created distance between consumers and financial institutions, it might just be the key to bridging the divide. Banks have access to information about people that reveals the most about them, their needs, goals and habits. Their ability to make sense of it – and help customers do the same – will make or break their efforts to reconnect with consumers and move their businesses forward.

Here’s why:

1. Go from a source of stress to a source of stress relief

“Consumer demand for brands that deliver instant happiness and comfort will propel category growth. In 2022, consumers will turn to uplifting, pleasing products and experiences that offer a reprieve from the fatigue of ongoing uncertainty.” That’s according to Forrester’s Consumer Technographics analysis, which has also revealed that it’s the lingering fear around physical and financial health, mixed with modest optimism for a post-pandemic recovery that’s pushing customers towards brands that provide an immediate sense of relief.

Banks hardly fall into this category. Yet, with a growing number of Gen Zers among their customer base, now’s the time for them to regain relevance.

With financial prospects that are much less rosy than before the pandemic, Gen Z is set to become the most diverse, money-conscious and financially literate generation to date. Helping them set and achieve financial goals and build resilience is where banks can really shine. How? Using advanced data capabilities, they can continuously analyse customers’ income, expenses and spending behaviour, detect high-risk current accounts, warn account holders before their funds run out and highlight saving opportunities.

2. Know your customers better than they know themselves

 “Old truth: you are competing with your competitors. New truth: you are competing with the last best experience your customer had,” says EY’s Janet Balis about the post-pandemic playbook for marketers. Of course, a shift in customer expectations towards seamless digital experiences had begun long before the pandemic hit. Over the past 18 months, however, the shift has turned into an earthquake and seamless won’t cut it anymore. “Now that companies have their personal data, they want anticipatory, personalised experiences across the entire customer journey.”

Financial health and decision-making is one area with endless potential applications of predictive data analytics.

Based on transactional information, banks can detect if a payment due date is approaching and alert the customer about it days in advance. Other transactions can reveal if customers have entered a new phase in their lives, such as having a baby or starting retirement. In other words, they can pinpoint the very moment when customers need a completely new approach to savings and investments. This allows banks to follow up with well-timed financial guidance to boost customer engagement and build trust.

3. Embrace the way your customers like their data: bite-sized and easy to digest 

Big data has taken over our lives. “Data, camouflaged under friendly interfaces, is already part of the way in which technology has impelled us to relate to our environment,” explains University of Navarra professor Jose Luis Orihuela. “If learning to read and write through hypertext links was the literacy required to live in the world created by the Web, learning to read, visualise and interpret data will be the necessary skills to live in a hyperconnected world.”

That’s where banks can take the load off their customers’ shoulders, showing them key financial information broken down in a way that is easy to grasp and, if needed, act on. The new generation of money management tools must be built based on the understanding that to control their personal finances, people don’t need data. They need knowledge.

Showing a chart on how much a user spends on utility bills per month is nice. Sending off an alert that they are living beyond their means might be a lifesaver. Checking your current account balance online is routine. Getting a push notification from your bank on how to invest your extra income that month can be a game-changer. A widget that keeps track of your favourite stores is handy. A reminder on where you can get 2% cashback if you pay with your credit card is a goldmine.

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