It’s conference season for the Financial Technology industry which means trading business cards, visiting booths and mediocre cafeteria meals – but most of all, it is an opportunity to understand what trends are emerging in a space that is booming with innovation and the necessary capital to fuel it. One consistent theme that has been emerging in the last couple months is an increasing focus on consumer personalization in digital banking.
For hundreds of years banks and credit unions have serviced their members in a generic way, focusing on branch location and blanket marketing strategies to attract new members and expand services in their membership base. They have dabbled in persona and psychographic profiles to inform billboards and wall coverings. And some have even offered checks and cards that can be tailored to an individual's liking. But that just won’t cut it anymore.
With the evolution of open banking and the acceleration of digital banking caused by the Covid-19 pandemic, consumers are now gaining exposure to a more personalized banking experience, one that meets them where they are from an emotional and motivational perspective. Meet the neobank; it sounds like a bank, functions like a bank, but it sure doesn’t look like a bank and there is no physical branch location. Instead it is a consumer-focused experience attracting members and cardholders who are drawn to the theme embodied; for example parents, environment, love, karma, ethnicity, philanthropy, and the list goes on. If there is a common emotional or motivational driver out there, odds are there is a neobank that caters to it.
Another way personalization is appearing in the Fintech community is through data and analytics. The ability to use data and patterns to provide more personalized content, products, and services is another way to improve the end consumer’s experience. The exciting thing about this arena for banks and credit unions is that they are influencers. Imagine if your finances read more like an Instagram feed and your bank app resembled your cell phone’s app tiles. Or even to the point of having an on-demand assistant that could communicate trends, read you your financial goals and move money around to assist you in reaching them. With hyper-personalized finances your money management could be automated and your consumer experience tailored to your current financial situation – how about that!?!
An example of personalization early creators, Eno by Capital One, is among industry leaders in developing technology with a focus on delivering a personal experience for consumer finance management - Eno is a service designed to look out for you and your money around the clock. Capital One created Eno with Artificial Intelligence technology to provide personal insights and advice about your money while also assuring you shop safer and smarter online with fraud protection. Eno is like having a personal financial assistant at your side.
Eno and other personal finance management applications like Mint, Wally, Truebill, and Cleo are becoming popular with Millennials. These apps have also become more accessible than ever with a simple download to your smartphone. With these apps, you can have personalized finances right at your fingertips, wherever you are. And while both neobanks and personal finance management solutions are exciting, the world of personalization can go much deeper.
According to the Digital Banking Report, currently only 6% of financial institutions have created advanced personalization technology even though 81% of consumers want companies to understand them better. Additionally, nearly 90% of banking consumers who have been provided with personalized services are highly satisfied, which furthers why hyper-personalization is such a hot topic on the conference circuit in 2021. This also validates and encourages FinGoal to further create technology that contributes to this need.
FinGoal is rapidly developing infrastructure and analytics that enable fintechs and financial institutions to access more spending data and analyze patterns in individuals’ purchases to help those users and members achieve their financial aspirations. The days of blanket statement marketing, not having a 360 degree view of a member, and even entering a bank branch are numbered. The future of banking is digital and it is hyper-personalized. See you all at Money 20/20… ¯\_(ツ)_/¯