This post is an excerpt from our latest report: ‘Financial Wellness. A gift for them, a gift for you’ that deep dives into research around how consumers feel about their pension and investment providers, and how providers can unlock business benefits through focusing on financial wellness.
Asking people to engage with their financial wellness is akin to asking people to engage with their GP surgery. They do it when it’s necessary; communication is sporadic and sometimes confusing – and it isn’t a relationship that’s nurtured for long term health. How much healthier could people potentially be if their GP surgery was actively engaged in their futures, today?
This is the opportunity providers have in unlocking financial wellness with their customers; the chance to reimagine the relationship between customers and their money – and in doing so, become instrumental in helping them achieve their financial goals.For providers that do, the gift of primacy awaits…and it’s all wrapped up in financial wellness.
Ingredient 1: Data
For providers, the right data offers unique insights into a consumer’s wider financial habits, needs, behaviours, challenges and opportunities. Imagine if you could see that 50% of your customers also have a savings account with one of your competitors. You could tailor your marketing messaging and direct communications encouraging them to specifically move those funds from that provider to you, with an enticing offer you know will really resonate.
As for consumers, the benefits of viewing their entire financial data from a single location are game-changing. By enabling a ‘single view’ of their finances, consumers can begin to see the wood for the trees – making better-informed financial decisions for their tomorrow, based on today.
Hidden habits, unnecessary outgoings and successful savings all come to the fore, helping consumers take control of their finances and search for new ways to support their lifestyle goals.
Ingredient 2: Tailoring
With insights gained and new opportunities identified, providers can begin to tailor offers and
personalise products that actually resonate with consumers. The key here is in using the data to define key differences between consumers. It’s these significant differences that providers must be able to identify and serve through Open Finance solutions; it’s by tailoring experiences that meet these needs that consumers get the most value – and providers edge ever closer in the race for primacy.
Of course, every consumer has their own financial story to tell. From where they are in their life stage, to their income levels and a host of external variables that dictate their financial priorities, there is no one-size-fits-all. Precisely where using data to tailor comes into its own. Open Finance technologies can drive specific people towards well-tailored choices, helping them embed healthier long-term money habits.
As financial institutions, you have the power – and responsibility – to show your customers what a good choice may look like. And if that looks like sacrificing a portion of that takeaway budget in order to contribute more towards their pension or other long-term investment each month, your business wins too.
From millennials to Gen Z, high to low earners, consumers of all demographics with the want to start investing but lacking the know-how are critical to your opportunity as a financial institution to build trust and promote financial wellness.
Ingredient 3: The power of nudges
With data and tailoring now working hand in glove, behavioural-based intervention becomes the final step in unlocking financial wellness. Enter ‘nudges’. Insight-based notifications, updates and tailored information that inform customers on specific financial activities, they’re the vehicle of delivery for providers – nudging consumers to take action, and take control.
“Consumers make financial decisions every day, whether buying a car or a TV and whether or not to use credit or even to get credit. Pensions are part of a wider universe in real lives. Providers have a big role to play in expanding consumer financial understanding, either by targeted and easy to digest information when action is needed, or better still, a continuous programme of bite sized information delivered in an eye-catching way, as early as possible. Nudges as part of a dashboard covering all of a consumer’s finances is the ideal.” - Margaret Snowdon OBE
We can see from our consumer app user base that almost three in five users respond to financial notifications as part of managing their overall money and finances within the app. This shows the power of nudges in enabling greater consumer insight, engagement and action – especially when compared to the traditional annual statement in the post.
Financial notifications and nudges cover a range of messages – from spending and saving to income alerts – all of which fold into the experience ecosystem, making it easy for consumers to take the next best action with their money.
Download the full Financial Wellness. A gift for them, a gift for you report here →