Background

Discussions about the future of banking are constant and reflect the ongoing evolution of banks and the concerted efforts to modernise internal banking systems and their supporting solutions. Banks of all sizes and across all geographies are aware that they need updated and modern technology in order to deliver the experiences and services that modern banking customers are looking for.

While significant strides have been made towards updating the digital banking ecosystem, it’s evident that banks are generally embracing these changes at their own pace and on their own timelines.

Transforming banking infrastructure is of course important for future success, but that doesn’t mean that every bank is ready to undertake a full overhaul of systems and their technology stack right now.

How does SaaS fit-in?

The advent of Software as a Service (SaaS) has revolutionised numerous industries, offering streamlined deployment and management options for solutions that were traditionally on-premise. This shift has now extended its focus to banking, where SaaS is increasingly recognised for its potential to modernise operations, enhance agility, and improve customer experiences. However, despite its transformative potential, not all banks are prepared to fully embrace SaaS solutions at present.

For banks, determining the optimal timing for adopting SaaS deployment depends on various factors. Conversely, sticking to on-premise or private-cloud deployments might be preferable in certain situations. It’s crucial for banks to weigh these factors carefully to make informed decisions about their IT strategies.

Exploring deployment choices: what options are available?

Banks have several deployment options available to them: on-premise, private cloud, and SaaS. Each option has its own benefits and ultimately, the choice of deployment option depends on a range of factors such as security needs, scalability requirements, and regulatory compliance.

SaaS

solutions eliminate infrastructure needs, offering simple access and regular updates, but may raise concerns about data privacy and control.

On-Premise

involves hosting software locally on the bank’s own servers and infrastructure. It offers high control but requires infrastructure investment and maintenance.

Private Cloud

leverages private cloud infrastructure managed by a third-party provider. This option provides scalability and flexibility while still ensuring a dedicated and secure environment.

Determining when SaaS is the right choice for a bank

Determining when a SaaS deployment is the optimal choice for a bank depends on various factors, including project goals, vendors available, integrations required and the regulatory environment.

Goals of the project

For some SaaS deployments, the scope of what can be offered is limited. If your financial institution is looking for a full scale deployment of a vendor’s solution be sure to understand the potential trade-offs when choosing a SaaS deployment.

Regulatory environment

The geographical location of the bank and the regulatory landscape it navigates is important. Data residency concerns may arise, especially concerning cross-border data movement. On the other hand, certain regulators advocate for banks to embrace cloud migration and explore SaaS alternatives. Either way it can influence whether a bank decides on a SaaS deployment.

Data integration requirements

For many SaaS providers, they can simply set up an instance for each client. However, for data-reliant solutions, the requirement for seamless data integration remains. Ensuring that internal systems can integrate to a SaaS environment is an important consideration.

What considerations are key when selecting a SaaS vendor?

When selecting a SaaS solution vendor, several critical considerations come into play, with reliability, scalability, and security topping the list.

Reliability

Reliability is paramount, ensuring that the vendor’s services are consistently available and perform optimally without disruptions. A robust infrastructure, redundancy measures, and proactive monitoring are indicators of reliability.

Scalability

Scalability is another crucial factor, especially for banks anticipating growth or fluctuations in demand. The chosen vendor should offer an infrastructure that can seamlessly accommodate increases in user base or data volume without compromising performance.

Security

Security is of utmost importance in the banking sector. Banks must ensure that the SaaS vendor adheres to stringent security protocols, such as encryption, access controls, and regular security audits. Compliance with industry standards and regulations such as SOC2 and ISO 27001 are also crucially important.

When SaaS isn’t the right fit

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Introduction

In the ever-changing landscape of personal finance, traditional savings mechanisms often face difficulties in engaging and motivating individuals to maintain consistent saving habits.

With the emergence of various alternative investment options and the allure of immediate gratification through consumer spending, the appeal of traditional savings accounts can sometimes diminish.

Additionally gambling-related issues continue to pose significant challenges to financial well-being, affecting individuals and communities worldwide.

This gap between traditional savings offerings and evolving consumer preferences highlights the need for innovative solutions that effectively incentivise saving behaviours while aligning with modern financial trends.

In this context, Prize-Linked Savings Accounts (PLSAs) emerge as a compelling solution, blending the allure of potential rewards with the discipline of savings, thereby incentivising regular saving behaviour while concurrently addressing concerns related to gambling.

What are Prize-Linked Savings Accounts (PLSAs)?

Prize-linked savings accounts (PLSAs) merge the conventional concept of savings accounts with the excitement of lotteries and prize draws. These hybrid financial products are crafted to incentivise individuals to save more by offering the opportunity to win prizes alongside accruing interest on their savings.

The origins of prize-linked savings can be traced back to 1694, when the British government introduced a lottery to finance the nation’s war efforts against France. Since then, lotteries have served as a revenue source for various governments in the form of Prize Bonds in Ireland and Bonus Bonds in New Zealand.

In the 20th century, the concept evolved further, for instance in the United States, where several credit unions began offering prize-linked savings accounts.

Online platforms and mobile applications have made it easier for individuals to participate in these programs, enhancing accessibility and broadening participation among the population.

While PLSAs have been around for some time, they are now gaining traction in countries worldwide as a strategy to foster financial literacy, encourage sound savings habits all the while adding an element of fun and avoid the financial wellbeing pitfalls of gambling.

Prize-linked savings combine many digital banking techniques such as money management, loyalty programs, and gamification.

How do prize-linked savings accounts work?

Prize-linked savings accounts (PLSAs) work by combining traditional savings accounts with the excitement of lotteries and random prize drawings. Here’s how they typically operate:

1.Customers make deposits

Customers make deposits into their PLSA as they would with any regular savings account or goals. These deposits are typically made in small increments, potentially leveraging auto-saving techniques, such as round-ups, smart sweeps or salary splits.

2. Customers earn prize draw entries

For predefined thresholds of money deposited or frequencies of contributions, customers earn entries into a prize draw. The more money saved, the more entries received, rewarding consumers of for their healthy financial habits.

3. Winners are selected

Periodically, for instance on a monthly or quarterly basis, a draw is held to select the winners, usually funded by a simple revenue share of the interest earned by the financial institution. Prizes may include cash rewards, gift cards, vouchers or other valuable items.

4. Interest is earned on savings

In addition to the chance of winning prizes, participants in prize-linked savings accounts still earn interest on their savings, providing the potential for higher returns compared to traditional accounts.

What are the benefits of prize-linked savings accounts?

Prize-linked savings accounts offer several benefits for individuals looking to save money and for banks looking to encourage engagement and increased deposits.

Incentivises saving

Prize-linked savings accounts provide an additional incentive to save by offering the opportunity to win prizes. This can motivate customers to deposit regularly into their savings account.

Drives increased engagement

The chance to win prizes adds an element of excitement and enjoyment to the saving process, making it more engaging and rewarding. By adding additional gamified experiences, banks can further increase levels of engagement.

Encourages financial literacy

Banks can use these prize-linked savings programs, as an opportunity to share financial literacy tips and to help customers learn valuable financial skills such as budgeting and goal setting.

Accessible to everyone

Prize-linked savings accounts are often designed to be accessible to individuals of all income levels and financial backgrounds, helping to promote financial inclusion and positive financial behaviour across various customer segments.

Positive customer experience

Unlike traditional gambling, participants in prize-linked savings accounts do not risk losing their savings. Even if they don’t win a prize, their savings remain intact and continue to earn interest leading to an overall positive experience with the bank, regardless of lottery outcome.

How can banks successfully implement prize-linked savings accounts?

Personalisation

Tailoring PLSA experiences to individual preferences and financial goals can significantly boost engagement and participation. Banks can implement personalised savings goals and rewards structures based on customer profiles and behaviour. For example, offering customised prize options or savings challenges aligned with specific savings objectives can make the PLSA experience more relevant and appealing to customers. Additionally, providing personalised financial advice and recommendations through digital channels can help customers make timely and contextual decisions about their savings strategies.

Gamification

Incorporating elements of gamification into PLSAs can make saving more enjoyable and motivating for customers. Banks can introduce interactive features such as progress tracking, achievement badges, virtual rewards and leaderboards to create a sense of accomplishment and competition among participants. Gamified challenges and quests can encourage regular savings habits and incentivise customers to reach their savings goals. By making the savings journey engaging and interactive, banks can increase customer satisfaction and retention while driving higher levels of savings participation.

Money Management

Effective money management is fundamental to the success of PLSAs. Banks can provide customers with tools and resources to track their spending, set budgets, and manage their finances more effectively. Integrating money management features into PLSA platforms can help customers monitor their ability to contribute more to their savings, identify areas for improvement to earn more chances, and make informed decisions about their financial goals. By empowering customers with the skills and tools they need to manage their money wisely, banks can enhance the overall impact of PLSAs and promote long-term financial well-being.

How Moneythor can help banks to implement prize-linked savings accounts?

The Moneythor platform offers a comprehensive solution for implementing prize-linked savings accounts (PLSAs), leveraging its unique capabilities in blending money management, loyalty, personalisation, financial literacy, and gamification techniques.

 

With Moneythor, financial institutions of all sizes can seamlessly integrate PLSAs into their customer journeys, providing customers with a rewarding and engaging savings experience. Additionally, Moneythor enables auto-savings techniques like roundups, smart sweeps, salary splits and more, making it easier for customers to save regularly and effortlessly.

 

The Moneythor loyalty features facilitates the management of prizes, whether they are cash rewards, points, gift cards, vouchers, or other items, ensuring a seamless and efficient prize distribution process.

Through the various features and functionalities that Moneythor offers, banks can effectively implement PLSAs and promote healthy and engaging savings programs for their customers.

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The value of incentivised referrals

With many financial institutions vying for market share, the pressure to distinguish oneself from competition is high. Simply offering basic banking services is no longer enough. Both traditional and digital banks must constantly adapt and innovate in order to attract new customers. Innovative strategies are the key to standing out in this crowded market.

Acquiring new customers is not just a strategic choice for banks; it’s essential for revenue growth. As banks expand their customer base, they tap into a wider pool of depositors, borrowers, and investors, ultimately leading to increased income streams. Statistics consistently underline the direct correlation between customer acquisition and financial success. Research reveals that banks with successful customer acquisition strategies experience higher profit margins and greater long-term financial stability. In an era where the financial industry is continually evolving, the ability to attract and retain new customers is a linchpin for sustained revenue growth, making it imperative for banks to prioritise effective acquisition strategies in their operational models.

Banks are exploring new avenues, such as incentivised referrals and Member-Get-Member (MGM) programs, to gain a competitive edge and increase the success of their acquisition strategies. Incentivised referrals involve rewarding existing customers (Existing To Bank or ETB) for referring new ones (New To Bank or NTB). This guide explores why such referrals can be a crucial tool for customer acquisition in banks when implemented correctly, and provides actionable insights on how to implement a successful referral program.

Incentivised referrals are when existing customers are motivated to recommend a bank’s products or services to their friends, family, or acquaintances. This process capitalises on the trust and credibility established within personal networks, as referrals from known sources are often more compelling to potential customers.

The role of incentivised referrals is to leverage this trust to amplify a bank’s reach, attract new customers, and foster growth. In the banking industry, referral incentives can take various forms, such as cash rewards, interest rate bonuses, waived fees, vouchers, lucky draw chances or exclusive account benefits for both the referrer and referee. These incentives serve as tangible rewards for loyal customers, encouraging them to actively participate in expanding the bank’s customer base, while simultaneously providing attractive perks to new customers, thereby creating a win-win scenario for all parties involved.

Incentivised referrals are highly effective due to the intrinsic trust and credibility associated with referrals from friends and family. When individuals receive recommendations from their trusted social circles, it triggers a sense of reliability and assurance, making them more inclined to explore the recommended bank’s offerings.

The psychological principle of social proof, wherein people tend to follow the actions of those they trust, comes into play here. Additionally, the introduction of incentives adds an extra layer of motivation, making the referrer more likely to advocate for the bank, while the referee, enticed by the promised rewards, is more likely to take action. This synergy of trust, social influence, and rewards makes incentivised referrals a powerful strategy in many industries including banking, fostering not only customer acquisition but also brand loyalty and long-term relationship banking, fostering not only customer acquisition but also brand loyalty and long-term relationships.

What are the benefits of incentivised referrals?

Cost-efficiency

In the realm of customer acquisition, incentivised referrals are inherently cost-effective compared to traditional marketing channels. Unlike expensive advertising campaigns or extensive outreach efforts, referral programs leverage the existing customer base, effectively transforming loyal clients into brand advocates. This not only reduces the need for substantial advertising budgets but also results in a more efficient allocation of resources. With incentivised referrals, banks can channel their investments more directly towards rewarding their existing customers for successful referrals, rather than pouring vast sums into broad marketing initiatives.

Improved customer loyalty

Implementing incentivised referral programs in banks not only helps attract new customers but also enhances the loyalty of the existing customer base. When customers actively participate in referring friends and family, they become more invested in the bank’s success and reputation. This increased sense of involvement tends to translate into greater loyalty, as these referrers are more likely to stay engaged and satisfied with the bank’s services. Moreover, their personal stake in the bank’s growth encourages them to explore other products and services, thus opening doors for cross-selling and upselling opportunities. The bank can capitalize on this trust and loyalty to introduce additional offerings, which are more likely to be well-received, further boosting revenue and solidifying long-term customer relationships.

How to implement a successful incentivised referral program?

Referral programs are not new. Most banks have trialled some version of a referral or Member-Get-Member program with varying degrees of success. So why should banks focus on referrals now? And what should be done differently to ensure they are successful?

Leverage the referrer / referee relationship

Leveraging the referrer/referee relationship is crucial to implement a successful referral program because it taps into the inherent trust and credibility within personal networks. Close friends and family recommendations carry significant weight, making the referral process more authentic and compelling. The Moneythor solution is capable of managing this relationship across both accounts providing rewards to both parties as they complete various tasks and actions.

Be smart with incentives

Being smart with incentives is vital to motivate both referrers and referees. By offering rewards that are attractive and valuable to participants, the program becomes more enticing and increases the likelihood of active engagement and successful referrals. Additionally applying incentives in interesting ways and splitting them across activities can enable banks to spread out the incentives over time.

Do not stop at onboarding

A recurring issue of legacy referral programs is that they used to deliver the referral reward at the time of a successful onboarding and stop there, leading to numerous new customers only completing the process to earn the reward, but disappearing after this initial step. Creating long-running activities post-onboarding for new customers to complete for both they and their referrers to receive the full incentives is a crucial method of modern referral programs. It can further be reinforced by nudging the referrers to nudge their referees into completing those additional steps to maximise their mutual benefits.

Use challenges and gamification techniques

Using challenges and gamification techniques adds an element of fun, driving increased participation and enthusiasm. Creating challenges or incorporating gamified elements into the referral process makes it more enjoyable for participants, encouraging sustained engagement and fostering a sense of competition and achievement throughout the program.

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Introduction

In an era where digital transactions and online banking have become the norm, financial institutions find themselves at a critical juncture — they must strike a delicate balance between robust security measures and a seamless user experience.

Preventing scams and fraud is paramount to protect both the institution and its customers, but introducing too many security barriers can frustrate users and hinder the efficiency of everyday financial interactions.

Finding the right balance between safeguarding against malicious actors and ensuring a smooth, frictionless experience for genuine customers is a complex challenge that demands innovative strategies and technologies.

This delicate balancing act is not only essential for building trust and preserving the integrity of financial institutions but also for delivering the convenience and accessibility that modern consumers increasingly demand.

It’s well documented that personalisation plays a pivotal role in creating seamless customer journeys. But what role does it have in ensuring digital security for banking customers? How can the basics of personalisation be used to create experiences that encourage fraud detection and prevention, while simultaneously creating engaging and delightful experiences?

The state of fraud in the banking industry has become increasingly concerning in recent years, with a significant surge in fraudulent activities. According to SEON’s Global Banking Fraud Index 2023, the global neobank market witnessed remarkable growth, with its value rising by nearly $20 billion in 2022. This substantial expansion of the neobank sector has also attracted the attention of fraudsters looking to exploit vulnerabilities in these emerging financial institutions.

In parallel with the growth of neobanks, SEON’s report highlights a worrying trend in card fraud across the financial sector. In 2022, approximately 36% of all financial institutions reported incidents of card fraud, marking a troubling 26% increase compared to the previous year. This sharp rise in card fraud underscores the ever-evolving tactics and sophistication of fraudsters, who continue to find innovative ways to compromise the security of banking systems and exploit unsuspecting customers.

As the financial industry continues to embrace digital innovation and online services, combating fraud remains a paramount challenge that banks and financial institutions must address to protect their customers and maintain trust in the industry.

How are regulators responding to the increase in fraud?

Regulators around the world have been responding proactively to the alarming increase in fraud attacks targeting the banking industry. Their efforts are aimed at safeguarding both financial institutions and consumers from the growing threat of cybercrime. Here are some key ways in which regulators are addressing phishing attacks in banking:

• Strengthening cybersecurity regulation

Regulatory bodies have been enhancing cybersecurity regulations for financial institutions, mandating stronger security measures to protect against fraud. These regulations often include guidelines for multi-factor authentication, data encryption, and regular security audits.

• Incident reporting requirements

Many regulators now require banks to promptly report any data breaches and security incidents, including phishing attacks. This enables regulators to monitor trends, assess the impact of attacks, and provide guidance on incident response.

• Customer education mandates

Some regulatory bodies require banks to educate their customers about phishing risks and how to recognise phishing attempts. These educational efforts aim to empower customers to protect themselves and report suspicious activity.

• Penalties and fines

Regulators have the authority to impose significant fines and penalties on financial institutions that fail to implement adequate cybersecurity measures or do not report security breaches in a timely manner. These penalties serve as strong incentives for banks to invest in fraud prevention tactics.

Why is preventing fraud so important for banks?

Banks need to ensure customer’s digital security for several compelling reasons:

• Trust and reputation

Trust is the foundation of the banking industry. Customers entrust their money and sensitive financial information to banks. If a bank fails to adequately protect this data and its customers experience fraud or security breaches, it can erode trust and damage the bank’s reputation, potentially leading to customer attrition.

• Legal and regulatory requirements

Banks are subject to a myriad of laws and regulations that mandate the protection of customer information and assets. Non-compliance can result in significant financial penalties and legal consequences for the institution.

• Financial Liability

In cases where customers suffer losses due to security breaches or fraud, banks may be held financially liable if they are found negligent in their security measures. This can lead to costly litigation and compensation payouts.

• Customer retention

Ensuring security is not only about protecting against threats but also about retaining customers. If customers perceive that their financial institution does not prioritise security, they may seek alternative banking options that they perceive as safer.

• Competitive advantage

Banks that invest in robust security measures can use this as a competitive advantage. Customers are increasingly considering security as a key factor when choosing a bank, so institutions that prioritise security can attract and retain more customers.

Select the right channels

Personalisation enables institutions to communicate with customers through secure channels and methods they prefer, reinforcing trust and making it easier to verify the legitimacy of communications.

Detect risky transactions

Personalised risk assessment models can detect anomalies in spending patterns or transactions’ locations and trigger real-time alerts or additional authentication steps when necessary, effectively thwarting fraudulent activities.

Personalised fraud alerts

Monitoring systems can generate personalised alerts and actionable notifications that are highly relevant to individual users. This includes transaction alerts for large or unusual purchases, duplicate transaction notifications, and timely account activity summaries. When users receive these insights, they are more likely to notice and report any unauthorised activity promptly, helping to mitigate fraud.

Educational tools and tips

Banks can aim to make fraud prevention education an ongoing effort and adapt their strategies to address evolving threats and technologies. Using in-app contextual educational messages can empower customers with knowledge and tools to help reduce the risk of fraud and create a more secure banking environment for everyone.

Engaging challenges and games

Incorporating in-app challenges and games is an innovative and engaging way for banks to prevent fraud. By turning fraud prevention into an interactive experience, banks can educate their customers about security risks and best practices in a fun and memorable manner. For instance, customers can participate in quizzes or games that teach them to recognise phishing attempts or identify suspicious transaction patterns.

Conclusion

Through the tailoring of digital services, communication channels, and security measures to individual customer needs and behaviours, banks can forge seamless and secure experiences that strengthen trust and mitigate fraud risks.

Personalisation enables institutions to foster deeper connections with their customers, empowering them with the tools, knowledge, and support necessary to protect their financial well-being.

The integration of personalisation not only enhances the user experience but also fortifies defences against scams and fraud by aligning security measures with individual preferences. In an era where digital threats continue to evolve, personalisation emerges as a critical strategy for the financial industry, offering a path forward towards a safer, more resilient, and customer-centric future of banking.

As banks continue to harness the potential of personalisation, they can lead the charge in redefining the banking landscape, ensuring that every interaction is not only seamless but also safeguarded, for the benefit of both institutions and their valued customers.

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The role of mutual banks (mutuals), co-operatives (co-ops) and other customer owned banks in Australia cannot be underestimated. They are integral to communities nationwide boasting a legacy of many years of service.

With this legacy comes a level of experience and understanding of the unique needs of customers to achieve their financial goals. What sets the customer owned banking sector apart is its members’ commitment to community development, evident in their sponsorships, community banking initiatives, and extensive philanthropic endeavours. Operating with a people-first approach, mutuals and other customer owned banks focus on delivering financial products & services that consistently yield high levels of customer satisfaction.

Despite being relatively small players within the vast financial ecosystem, mutuals or customer-owned banks exert a disproportionate influence on numerous areas and communities throughout Australia.

To continue making this substantial impact for their members, these institutions must embrace progress on various fronts, as customer needs and overall well-being are undergoing transformative changes.

What we will cover in this guide

Increasing financial pressures

The increase in interest rates has stirred widespread concern in a country where property prices continue to outpace average incomes, leading numerous borrowers to shoulder substantial loans

As the Reserve Bank of Australia initiated rate hikes starting from May 2022, aiming to address inflation, many households found themselves under immediate financial strain. Inflation has proven to be both more elevated and persistent than initially anticipated. People’s contentment with the overall economy and their personal financial situations decreased throughout 2022, despite remaining within the typical range. There is a noticeable lack of satisfaction amongst consumers with the ongoing cost-of-living challenges undoubtedly contributing to this sentiment.

Natural disasters causing additional financial stress

The frequency of natural disasters and extreme weather occurrences in recent years has predictably influenced the financial wellbeing of many Australians.

These events collectively subtracted $5 billion from the Australian economy in 2022, primarily due to significant disruptions in key sectors such as mining, agriculture, tourism, and construction.

In addition to the financial instability caused by these incidents,
households in affected regions will face the added burden of higher insurance premiums, a direct consequence of the rising occurrences of extreme weather and natural disasters.

The state of customer wellbeing in Australia in 2023 has experienced significant challenges across multiple fronts. This dual burden of changing macro-economic conditions and environmental disruptions has created a notable decline in financial wellness, underscoring the need for comprehensive measures to address these issues and restore wellbeing across the country.

Why Should Mutuals Focus on Improving the Financial Wellbeing of their Members?

Improved financial wellbeing brings a range of benefits, positively impacting various aspects of an individual’s life and of society. Financial wellbeing closely aligns with mutuals priority of people-first banking. Key advantages include:

1. Reduced Stress

   A solid financial foundation leads to reduced financial stress, allowing individuals to focus on other aspects of their lives without the constant worry of making ends meet.

2. Enhanced Mental and Emotional Wellbeing

   Better financial health often translates to improved mental and emotional health, contributing to overall happiness and life satisfaction.

3. Increased Financial Security

   Improved financial wellbeing means individuals are better prepared to handle unexpected expenses, emergencies, and are less vulnerable to financial shocks.

4. Retirement Readiness

   Improved financial wellbeing ensures individuals are better prepared for retirement, with sufficient savings and investments to maintain their desired lifestyle.

5. Increased Flexibility

   Financial wellbeing grants individuals the freedom to make choices based on their preferences and values, rather than being solely driven by financial constraints.

6. Generational Impact

   Improved financial wellbeing can have a positive impact on future generations, creating a legacy of financial responsibility and education.

7. Community and Societal Benefits

   A population with improved financial wellbeing can have broader benefits for society, including reduced reliance on social support programs and increased economic stability.

How can Mutuals Help Customers to Improve their Financial Wellbeing?

Mutuals or customer-owned banks have the capability to bolster their customers’ financial wellbeing by providing valuable guidance and resources. These offerings serve a dual purpose: assisting individuals and families in navigating difficult situations while also improving their long-term financial stability.

Here are some of the tools and supports that mutuals can offer their customers:

Personalised Insights & Financial Management

Financial Literacy Tools & Tips

Savings Goals

Budgeting Tools

Predictive Money Management

Phishing and Scam Alerts

Personalised Insights & Financial Management

Through the provision of tailored insights and recommendations, mutuals can offer their members a more transparent view of their existing financial position and circumstances. Utilising user-friendly transaction displays, real-time alerts, and concise expense summaries, member-owned financial institutions can simplify the potentially overwhelming process of comprehending spending habits and financial patterns.

Moreover, by harnessing the Consumer Data Right (CDR) and its Open Banking component, mutuals can equip their members with a comprehensive perspective of their financial situation, encompassing information from multiple financial institutions. This holistic understanding of their finances serves as the crucial initial step in formulating a strategic plan to navigate the challenges they face, helping individuals and families chart a path towards financial stability amidst uncertain times.

Financial Literacy Tools & Tips

Empowering consumers with essential financial tools and knowledge, on a range of topics such as budgeting, saving, investing, debt management, and financial products and services, equips them to make informed choices and steer clear of financial challenges. Mutuals can offer this valuable information through regular and contextual bite-sized pieces of content and recommendations within their banking apps as well as other channels including email, SMS and push notification. This personalised tips gradually enhance members’ financial literacy over time.

Furthermore, mutuals have the opportunity to incorporate gamification strategies to create more engaging financial education experiences to specific segments of their base. This approach not only provides members with the knowledge needed to navigate challenges but also lays the foundation for their future financial achievements.

Savings Goals

Savings goals significantly enhance financial wellbeing by providing direction and purpose to an individual’s finances. They foster focus and also encourage responsible money management.

Savings goals often start with building emergency funds, preparing for unexpected expenses, and paying down debt, leading to financial stability and reduced stress. Long-term planning, facilitated by savings goals, ensures individuals are better equipped to handle life’s uncertainties, such as retirement or medical expenses.

Achieving these milestones boosts financial confidence, reducing financial worries and enhancing overall peace of mind. Ultimately, savings goals act as a roadmap to financial success, promoting wise financial decisions, resilience, and a sense of control over one’s financial future, thereby significantly improving financial wellbeing. Mutuals can provide savings goals, pots or virtual pockets within their digital channels with limited impacts on their core systems.

Additionally, to maintain members’ dedication towards savings, mutuals can reward good saving behaviours with personalised rewards and incentives.

Budgeting Tools

Mutuals can assist their members in crafting practical and achievable spending budgets, based on personalised insights and past spending patterns. By providing Personal Financial Management (PFM) tools that include intelligent budgeting features, members can conveniently monitor their income and expenses in a single user interface, ensuring that their spending aligns with their financial objectives and preferences.

Employing real-time data and insights, mutuals can play a crucial role in keeping their members on course with their budgetary plans and targets, thereby ensuring sustainable long-term financial security.

Predictive Money Management

Advanced predictive financial management tools, such as financial forecasts and alerts, empower individuals to project their income and expenses for a defined period. This capability helps with efficient resource allocation, allowing them to prioritise essential expenditures and find opportunities for adjustments or reductions to address the rising cost-of-living.

Financial forecasts offer a proactive view, enabling individuals to anticipate potential financial hurdles and take pre-emptive steps to avoid difficulties. Leveraging historical transaction data, Mutuals can readily offer these predictive insights to customers, serving as a preventative measure to safeguard their financial stability.

Phishing and Scam Alerts

Provide prompt and tailored notifications and nudges to your customers whenever there is a rise in phishing attacks or scams affecting either your bank’s clients or participants in the broader market.

Educate customers on how to spot and avoid scams by delivering proactive and personalised educational nudges with guidance and best practices.

Alerts can be delivered via in-app pop-ups, push notifications, messages in the app inbox, or through email.

Conclusion

Mutuals, co-ops and customer owned banks in Australia play a vital role in improving the financial wellbeing of their members and communities. Their people-first approach and commitment to community development position them as valuable partners in helping individuals navigate challenging financial circumstances while working towards long-term financial stability.

By enhancing their digital services with tools like personalised insights, financial literacy resources, savings goals, budgeting, and predictive money management features, mutuals can empower their members to make informed decisions, reduce financial stress, and achieve their financial goals.

hese initiatives not only benefit individuals but also contribute to broader societal wellbeing by promoting economic stability and helping people to cope with external challenges such as rising inflation and natural disasters. As mutuals continue to evolve and adapt to changing consumer needs, they can make a meaningful difference in improving the financial wellbeing of their members and the communities they serve.

The post Enhancing Financial Wellbeing: The Role of Australian Mutuals appeared first on Moneythor.

African consumers are swiftly embracing and adopting digital solutions, leading to a transformative shift in the way financial services are accessed and utilised on the continent. Africa had around 570 million internet users in 2022, a number that more than doubled compared to 2015.

With the widespread availability of internet and affordable mobile technology, African consumers are leveraging digital platforms to overcome traditional hurdles and limitations associated with legacy physical banking infrastructures.

This trend is particularly prominent in urban areas, where access to traditional banking services in the past has been limited.

Mobile money platforms, such as M-Pesa in Kenya and EcoCash in Zimbabwe among other equally mature services in the region, have gained immense popularity, allowing users to make payments, transfer funds, and access financial services through their mobile devices.

Now is the time for traditional and new financial services providers in Africa to enhance their capabilities and meet the expectations of a rapidly growing and highly digitalised market.

 

In this guide we will dive into:

Growth opportunities for financial services providers in Africa

Challenges faced by financial services providers in Africa

The role which Personal Financial Management (PFM) capabilities can play in growing the continent's digital banking adoption and value to customers

Growth Opportunities for Financial Service Providers in Africa

 

• Rise in digital adoption

Although rates of digital adoption vary across countries, certain markets have seen huge growth over the last number of years. For example, in Rwanda, where there has been heavy investment in digital infrastructure; 90 percent of the country has access to broadband internet, and 75 percent of the population has cell phones.

The rapid rise in digital adoption presents a significant opportunity for financial service providers in Africa to revolutionise their offerings and tap into previously untapped markets.

By leveraging the power of technology, these providers can offer a wide array of innovative financial products and services, tailored to the specific needs and preferences of African consumers.

Additionally, digital capabilities allow for greater efficiency, cost-effectiveness, and scalability.

• Large unbanked population

The African continent is home to a large population of unbanked individuals, with approximately 350 million adults lacking access to financial services.

These unbanked populations across Africa represent a significant opportunity for financial services providers to bridge the gap and extend their reach to previously underserved markets.

Digital banking solutions can provide a convenient and affordable way for individuals to manage, save and grow their money.

By tailoring their digital offerings to the specific needs and realities of the unbanked, financial services providers can not only expand their customer base but also drive sustainable growth and make a positive impact on the socioeconomic landscape of Africa.

• Open Banking

Open Banking is a transformative force in many countries, driving financial inclusion and giving consumers easier access to financial tools, services and products.

In Africa, regulator- or industry-led Open Banking developments are spreading across the continent with banks and fintech firms offering Open Banking, aggregation and/or Open Finance services in countries such as Kenya, Nigeria, South Africa, Morocco, Egypt and Tanzania to name a few.

The growth in the Open Banking space in Africa provides opportunities for new and traditional banks to upgrade their service offering and provide inclusive and customer-centric solutions to those who need them.

• Digital-only Players

Neobanks and challenger banks in Africa are well-positioned to meet the digital challenges of consumers in Africa. Many of the top challenger banks in the market have raised significant capital as part of their strategies to bring revolutionised and digital-only solutions to African markets.

These neobanks are playing a crucial role in transforming the financial landscape of the continent and empowering individuals and businesses with convenient and affordable banking services.

 

Challenges Faced by Financial Services Providers in Africa

 

• Low levels of financial literacy

Limited knowledge and understanding of financial concepts, products, and services among the population hinder the effective uptake and utilisation of financial services.

For most countries on the continent, less than half of the population of adults are considered financially literate, with the exception of Botswana (51%). 40% of adults in Tanzania, 27% of adults in Egypt and 26% of Nigerian adults are considered to be financially literate.

This lack of financial literacy leads to a reluctance to engage with formal financial institutions, resulting in low levels of financial inclusion.

To address this challenge, financial services providers must invest in comprehensive financial education initiatives that empower individuals with the knowledge and skills to make sound financial decisions.

• Low digital banking adoption

Despite the growing availability of digital financial services, a significant portion of the population across Africa still prefers traditional banking methods or has limited access to the necessary technology and infrastructure. This low adoption also hampers the potential for financial inclusion, as digital banking offers numerous additional benefits such as convenience, accessibility, and cost-effectiveness.

To address this challenge, providers must invest in improving digital infrastructure, expanding mobile network coverage, and promoting digital literacy. Offering user-friendly experiences, secure platforms, and educating the population on the advantages and safety measures of digital banking can help increase adoption rates.

By overcoming the barriers to digital banking adoption, financial services providers in Africa can unlock the full potential of technology to improve financial access and empower individuals and businesses across the continent.

 

 

The Role of PFM in Driving Digital Banking Adoption in Africa

 

Personal Financial Management (PFM) solutions provide users with powerful tools to manage their finances effectively. They enable users to track their expenses, create budgets, analyse spending patterns, set financial goals, get clear visual representations of financial data and receive personalised financial insights and recommendations. PFM solutions can play a crucial role in driving digital adoption in Africa. Here’s how:

 

• Encourages digital adoption

By integrating PFM features into digital banking platforms, financial services providers can offer a more engaging and personalised user experience, making digital banking more appealing and useful to customers who traditionally prefer physical banking solutions.

PFM solutions can also offer new and improved ways of representing transaction data in-app. Categorised transactions can appear in graphs, images or in a “transaction feed” (similar to a news feed found in social media). These visually appealing and easy-to-comprehend displays of data feel familiar to consumers and are easier to digest than traditional transaction statements.

In this way, PFM solutions remove barriers for users who may be less familiar with digital technologies, encouraging them to embrace digital banking.

• Improves financial literacy

PFM solutions can provide educational resources, tutorials, and tips on financial management. These tools can help users understand financial concepts, such as budgeting, saving, and investing. By offering accessible and user-friendly educational content within the banking apps, individuals can improve their financial literacy gradually.

PFM solutions also enable users to set financial goals, such as saving for emergencies or planning for retirement. By tracking their progress towards these goals within digital banking platforms, individuals can stay motivated and make necessary adjustments to their financial behaviours. This helps individuals develop a long-term financial perspective and improve their financial decision-making.

• Drives growth of banking industry

Across all markets including Africa, financially savvy customers are more profitable for financial institutions than those who are less financially savvy.

They tend to spend more, engage more and purchase more financial products and services.

In order to drive the long term sustainability of digital banking solutions, financial services providers in Africa need to build a customer base of financially savvy users. Such PFM solutions can provide the tools and advice such as budgeting, financial literacy advice and cash-flow notifications to improve the knowledge and confidence of African consumers.

Over time this can expand the audience of savvy and profitable customers for financial service providers to target with more complex products and services.

 

Conclusion

PFM solutions hold great potential for driving digital banking adoption in Africa. These solutions offer user-friendly experiences, financial visibility, personalised insights, and goal-oriented approaches that make digital banking more accessible and relevant to individuals with varying levels of financial literacy.

By empowering already technically savvy consumers as well as newly banked users in Africa to track expenses, set budgets, receive personalised recommendations, and gain control over their finances, PFM solutions foster trust, convenience, and financial empowerment.

Through their role in enhancing the value proposition of digital banking, PFM solutions can pave the way for increased digital adoption, financial inclusion, and economic empowerment in Africa. By bridging the gap between financial literacy and digital banking services, PFM solutions contribute to building a stronger and more inclusive financial ecosystem that benefits individuals, businesses, and the overall economy.

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According to the World Economic Forum,
1 in 4 people in developed countries are struggling financially. In the UK, the cost-of-living crisis is impacting millions of people, with 1 in 7 unable to afford to eat every day.

Statistics like these showcase the depth at which the current cost-of-living crisis is affecting people and their day-to-day lives.

With continuously raising inflation, central banks’ rate hikes and supply-demand crunches as a side effect of the Russian invasion of Ukraine, the world economy is facing a range of new challenges that will likely take time to recover from.

While we know that economic markets are cyclical and we expect rates of inflation and interest rates to level out in the future, the exact path to this future is unknown and will likely be paved with financial difficulties and stress for most people.

The question remains; how can banks support their customers during these difficult times and what role does financial wellbeing play in helping the most vulnerable amongst us?

In this guide, we will dive deeper into the current state of personal finances, suggest steps and programs that retail banks should consider launching in order to help their customers navigate these tough times ,and finally we will look to the future and how focusing on financial wellbeing now can build up financial resilience and stability for the future.

What we will cover in this guide

Why is financial wellbeing important during a cost-of-living crisis?

What is financial wellbeing?

Financial wellbeing refers to the state of an individual’s overall financial health and stability. It encompasses the ability to meet one’s financial obligations, effectively manage money, and make informed financial decisions that align with personal goals and values.

What role does it play during the cost-of-living crisis?

Financial wellbeing during the cost-of-living crisis provides individuals with the tools, knowledge and confidence to navigate financial challenges effectively. It empowers individuals to make informed decisions, build financial resilience, and optimise their financial resources to weather the current crisis and improve their long-term financial stability.

What are some of the ways financial wellbeing can help people weather the crisis?

• • It helps people manage their resources effectively.
  • It enables individuals to develop and maintain realistic budgets based on their income and expenses.
  • It provides individuals with knowledge about responsible borrowing and debt management.
  • It equips individuals with the tools to evaluate financial products, services, and investments.
  • It encourages people to proactively seek financial advice and access support.

How can banks support customers during the crisis?

Banks can support their customers during the cost-of-living crisis by offering short-term financial relief. They should also offer guidance, and resources to not only help individuals and families navigate challenging economic circumstances but to improve their long-term financial wellbeing.

Here are some of the ways banks can help customers navigate the crisis and improve financial wellbeing through their digital channels:

Personalised financial management

By providing personalised insights and recommendations to customers, banks can provide them with a clearer picture of their current financial standing and situation.

Using easy to read transaction feeds, real-time notifications, and clear spending overviews, banks can make the daunting task of understanding spending behaviours and financial routines simple.

Banks can also use Open Banking or even Open Finance and data aggregation to provide their customers with a holistic view of their finances across multiple sources.

The ability to understand finances is the first step in building a plan of action to get through the uncertain times of the cost-of-living crisis..

Financial literacy & education

Providing customers with the tools and understanding of financial concepts, such as budgeting, saving, investing, debt management, and understanding financial products and services, enables individuals to make informed decisions and avoid financial pitfalls.

Banks can provide this information through contextual bitesize notifications and recommendations within banking apps to help customers build up their financial literacy overtime.

Additionally, banks can look to use gamification techniques to provide deeply engaging financial education that will not only give customers the knowledge to get through this current crisis, but set them up for future financial success also.

Financial planning tools

Banks can help customers to develop and follow realistic and manageable budgets based on personalised insights and previous spending behaviours. By providing Personal Financial Management (PFM) tools including budgeting and intelligent savings in app, customers have one place where they can track income and expenses and ensure that their spending aligns with their financial goals and priorities.

By using real-time data and insights, banks can help their customers to stay on track with their budgets and savings goals to ensure long-term financial success.

Predictive financial management

Predictive financial management tools like financial forecasts or alerts allow individuals to project their income and expenses over a specific period. It helps them to allocate their resources effectively, prioritse essential expenses, and identify areas where they can make adjustments or cut back to cope with the increased cost-of-living.

Financial forecasts provide a forward-looking perspective, enabling individuals to anticipate potential financial challenges and take proactive measures before they get into difficulty.

Using historical transaction data, banks can easily provide these predictive insights to customers to prevent their financial situation from deteriorating.

Conclusion

Addressing the cost-of-living crisis requires a multi-faceted approach, including measures to control inflation, promote wage growth, and provide affordable housing options. Banks alone cannot “fix” the crisis. However, they can provide financial relief options to support customers in the short and enhanced financial education for long-term financial stability and growth.

Financial wellbeing and education during a cost-of-living crisis provide people with the tools, knowledge, and confidence to navigate financial challenges effectively. It empowers them to make informed decisions, build financial resilience, and optimise their financial resources to weather the crisis and improve their financial situation.

By making financial management tools and insights available through digital channels, banks can become an invaluable source of support to customers during the cost-of-living crisis.

At Moneythor, we offer a range of features that are proven to help customers improve their financial wellbeing and literacy overtime.

The post Financial Wellbeing in a Cost-Of-Living Crisis appeared first on Moneythor.

Traditionally, fintech and banking product marketing teams are constantly ideating to come up with new and innovative offerings to entice consumers. However, what if the script was flipped and customer feedback and requirements were leveraged to inform the ideation and planning of new product launches?

The sheer amount of data available to financial institutions, made even broader thanks to open banking, has revolutionised the way they can decipher consumer needs and build long-lasting relationships around trust and understanding.

As a result, new product roadmaps prioritise innovative solutions that allow consumers to understand their environmental impact, while also helping them achieve financial wellbeing. There is an intrinsic link between the two, as financial insecurity and climate change are two very serious consequences younger generations have to grapple and come to terms with.

Deep dive into the modern customer experience

Tech-savvy consumers have access to a wide range of resources to help manage their personal finances. To launch products that stand out, banks should be actively tapping into their customers’ experiences in order to understand and align with their needs, aspirations and values.

Consumers are increasingly showing an awareness and preference for banks that take definite actions toward climate change, and they expect transparent and engaging financial services that are able to reflect and support these needs and preferences.

Globally, the bar for change is high:

• 73% of global consumers say they would change their buying behaviour to reduce their impact on the environment.
• 51% of consumers believe they are doing all they can to make purchase decisions that shape a more sustainable future, but 68% expect policy and companies to take a lead.
• 55% of consumers believe they should drive companies and organisations to lead on better social and environment outcomes.

(Source: EY, 2021)

Improving financial literacy levels for users globally

While environmental sustainability is a primary concern for many, sustainability goes beyond just climate change. Real, holistic sustainability also means recognising and addressing the financial concerns and stressors of younger customers.

Financial resilience has been a key topic in the road to recovery from the economic fallout of COVID-19. Financial stress has a direct impact on customers’ mental and physical wellbeing, as well as overall productivity levels in our societies.

To bolster financial literacy, banks can equip consumers with the right tools to achieve their financial goals. As such, the accelerated rate of development for digital banking offerings as a consequence of the pandemic has been a silver lining for banks across the globe.

The biggest, most innovative banks are looking beyond simply providing consumers with simple personal financial management (PFM) tools and looking to more holistic solutions designed to truly help their customers improve their finances. Consumers are more likely to adopt new financial management techniques if they’re presented with a contextual stream of valuable personalised content and actionable insights that will manifest into improved financial behaviour in the long run.

A good example of a holistic financial wellbeing approach is ANZ Australia’s online Financial Wellbeing Challenge. The challenge encourages customers to sign up to receive coaching, missions and tips around how to get more “financially fit”.

Such campaigns provide customers with an engaging and free resource to help them plan their expenses, manage their debt, set savings goals and start investing. This kind of long-running programme aims to not only set financial wellbeing in motion, but hopefully to instil better financial habits for individuals in the long run.

Another Australian bank that is helping its users by developing a more robust financial wellbeing tool is Commonwealth Bank of Australia. CBA now offers a benefits finder that helps consumers understand and discover their eligibility for concessions, rebates or tax relief. What had originally begun as a system for consumers to process COVID-19 affected flight refunds has now developed into an innovative financial wellbeing tool applicable for both personal and business banking, thus supporting users across the board in understanding what benefits they are able to access through and beyond the pandemic.

The lifeboat

The race towards holistic, sustainable transformation, spurred on by demand from today’s savvy, conscious consumers, presents a unique problem for legacy banks: in the age of “cancel culture”, how can they continue to keep the ship of legacy services afloat by improving functionality and usability, while encouraging the loyalty of informed consumers?

Partnerships are a lifeboat for banks, in a sense that they provide ready-made, specialised tools to enable agility and quick action in an increasingly competitive and changing landscape. The partnering of fintech innovators Moneythor and Cogo, for instance, enables banks to provide their customers with both financial wellbeing and climate conscious banking solutions.

Banks using Moneythor’s data-driven personalisation platform integrated with Cogo are able to offer their digital banking customers the ability to track their carbon emissions and therefore understand their carbon footprint off the back of spending habits directly via their banking apps. When it comes to staying ahead of the curve, collaboration and partnerships are key to overcoming seemingly impossible challenges.

Combining forces gives banks the ability to quickly enrich and add contextual information to customers’ spend at scale and enabling them to assign ’emissions’ to each of their transactions – giving customers accurate insight into their carbon footprint. What’s more, an actionable nudge engine helps shift customers towards more responsible financial choices, including climate impact reduction.

This kind of supercharged, multi-functionality enables personalised, engaging experience that spurs excitement and loyalty among customers looking for a value-added service.

Open Banking and the age of transparency

With Australia looking towards the next stage of Open Banking with Consumer Data Right (CDR) and gearing up for Open Finance, it is important for banks to educate their customers on how it benefits them as well. The benefits of Open Banking (and Open Finance) for the end users are significant.

Through the various ways it is interpreted globally, Open Banking enables consumers to have a holistic overview of their finances across any financial institution they might be banking with. The application of open banking is key to the deployment of programmes promoting financial wellbeing as it allows both banks and consumers to consolidate and access all financial data centrally.

This consolidation empowers end users significantly as traditional banks will now have to work harder to provide better options in order to not lose customers to challenger banks and direct-to-consumer fintech firms. The transparency that open banking provides also enables consumers to decide which products meet their needs best.

The evolution of personalisation

The demand for personalised financial management tools and services that focus on sustainability and wellbeing has never been more prominent. Banks need to evolve and look beyond providing consumers with basic PFM tools to stay ahead of the curve, especially in mature markets like Australia that are progressively applying open finance.

As such, the personalisation of digital banking services should allow banks to build a rapport with their users, support them in their financial endeavours and allow them to feel empowered enough to achieve their short- and long-term financial goals. When applied accurately, personalisation in digital banking has the potential to drive real revenue by increasing levels of customer engagement and reducing support costs for financial institutions.

However, data-driven personalisation is not without its own set of challenges. To focus solely on developing robust technology is not enough. Key tenets of focus while planning the application of personalisation should be consumer behaviour, human nature and cognitive biases built around lived experiences of users. Personalisation initiatives should strive to first and foremost be human centric and financial institutions (as well as fintechs) must not get carried away with data analytics, AI/ML models and technology at the expense of a customer-centricity.

There is a fine balancing act between embracing data analytics, behavioural science and respecting customer preferences. No organisation will own the consumer – rather, the focus should be in empowering consumers to own themselves. Digital banking solutions need to therefore be modular, flexible and be able to acclimatise to the widening array of customer needs and preferences.

The Moneythor solution enables the delivery of data-driven insights, contextual recommendations and actionable nudges tailored to every individual customer, preconfigured or uniquely crafted by the financial institutions to suit their financial wellbeing journeys, and leveraging behavioural science techniques.

Cogo’s Ethical Nudge Framework also uses behavioural science to personalise data in complex sustainability journeys. Depending on a user’s motivation and ability, banks will be able to help users move from a position of understanding to improving their impact by taking specific climate actions.

Bottom line benefits

Making sustainable lifestyle and financial choices more accessible to customers is a game-changing strategy for banks and financial institutions looking to differentiate themselves. But what are the tangible benefits to the bottom line, apart from regulatory requirements and customer demands?

Cost reductions

While committing to ESG (Environment, Social and Governance) might seem like a significant investment with no financial return, banks that score higher on ESG reports show higher ROI overall. Cutting carbon emissions and reducing waste and water use helps lower operating expenses (Source: McKinsey) and can increase overall profits by 60%.

Innovation and differentiation

Tackling ESG challenges will require banks to innovate. Whether it be through climate credit cards, integrated carbon tracking solutions, or even holistic financial wellbeing programmes catered to different age demographics for end users; financial institutions can create value through differentiating existing products or creating new products/services.

Business growth

According to PwC research, 83% of consumers think companies should be actively shaping ESG best practices. Banks need to create sustainable products and incorporate ethical business practices that will enable customers make feasible changes with their financial and sustainable habits, which in turn helps grow the business.

Improving employer brand

In the hunt for talent, employer brand is becoming more important than ever, and research shows that workers are driven to find jobs that align with their values. In fact, it’s reported that 76% of millennials consider a company’s social and environmental impact before accepting an offer.

As the cost of living and levels of inflation continually escalates globally, companies that commit to ensuring financial wellbeing for employees are making a valued difference to their employee’s overall health and wellbeing. Not only that, a commitment to financial wellbeing in the workplace also creates an environment for employees to flourish and maintain good standards of living, which improves organisational image and retains talent in the long run.

Attracting investors

Investors are looking for ways to generate returns from socially and environmentally responsible companies, so disclosing data around your company’s impact is a sure way to attract interest from investors.

As the saying goes, the best time to act was yesterday. The second-best time is now. Australian customers are looking for greater transparency around their spending footprint and towards managing their spending for a more sustainable, prosperous financial future.

About us

Moneythor

Moneythor is a software company founded in 2013 to provide banks and fintech firms with a modern toolkit to enhance their digital banking services, with a prime focus on the generation of data-driven personalised experiences for their customers. As a fully configurable platform and scalable orchestration engine, it sits between data sources and customer channels to deliver digital engagement in real-time.

A key focus of the Moneythor solution is in the delivery of contextual and actionable recommendations, insights and nudges to customers, preconfigured or uniquely crafted by their financial institutions. Examples of these include modern personal financial management (PFM) nudges, spending budgets, savings goals, predictive cashflow forecasts, financial literacy content, gamification, relevant offers and more.

Headquartered in Singapore, Moneythor is also present in Paris, Dubai, Sydney and Tokyo. The Moneythor solution is currently used by financial institutions in multiple countries such as Australia, Canada, France, Hong Kong, India, Indonesia, Japan, Malaysia, New Zealand, Saudi Arabia, Singapore and the UAE.

Cogo

Cogo is an impact-led fintech whose carbon tracking API and consumer app enables users and businesses worldwide to measure, reduce and compensate for their impact on people and planet.

Cogo’s company’s API enables banks and other corporations to integrate carbon and sustainability data into their customer experiences – for example by providing bank customers their carbon footprint within the bank’s own mobile app. The app supports behaviour change (reduction) through its world-leading ‘ethical nudge framework’; and offers users the ability to offset (compensate) the balance of their impact via carbon credits.

In addition, powered by open banking technology, the company’s app (currently in the UK) enables users to make easy, positive changes to their spending and lifestyle to help lower their carbon footprint.

Our pioneering technology and data help people better understand the effects of their daily decisions and help them take climate action. We support and encourage people on their journey to becoming more conscious consumers.

We believe in a new ‘impact economy’ where all businesses are a force for good.

The post A new era of digital banking: How banks are turning what their customers want into a business advantage appeared first on Moneythor.

Creating engaging, exciting, and seamless customer journeys is now vital for business survival, which places immense pressure for banks to innovate and build customer-centric solutions to meet evolving customer demands for better, engaging and more seamless customer experience (CX).

Personalization and personal financial management (PFM) are driving forces behind customer-centricity within the financial services landscape today, elevating digital customer experiences beyond banking.

Modern PFM solutions have the potential to power financial resilience globally and bring the next level of financial savviness to consumers.

In this thought leadership whitepaper jointly published with KPMG, take a deeper dive into building a customer-centric banking model with PFM, and evaluate how a leading bank in ASEAN uses Moneythor’s personalization engine to elevate their CX.

To learn more, you may also be interested in our guide to PFM Solutions for Banks and contact our team.

The post Customer-centricity in retail banking: Personalization appeared first on Moneythor.

It is undeniable that there is a relationship between financial literacy and the ability people have to navigate the impacts of unforeseeable financial events, whether this be unexpected losses in investments or the financial fallout out of a global pandemic or a recession. A lack of financial literacy directly results in inequality – people who are financially literate are able to make informed financial choices when it comes to saving, borrowing and investing, which translates to higher standards of living and a lack of financial anxiety down the line.

Recent surveys show a consistent worrying trend globally, such as 44% of adults in the UK believing that they would be in a better state financially if they had been taught money management skills, or 17% of Australians reporting not being confident at all about meeting their financial goals.

As the cost of living continues to increase globally, financial literacy becomes an ever more important skill to nurture. The ability to navigate fluctuations in household expenditure, repayments and to have intentional responses to global economic events and trends needs to be a priority for financial institutions and their customers.

The cost of financial ignorance is high and growing continuously. It is crucial to bolster financial literacy for the younger generation and provide them with a sound understanding of the fundamentals of financial management from a young age. In recent years, there has been a steadily increasing demand for family banking solutions, as consumers look for options to empower their children with financial literacy and independence.

What is family banking?

Receiving “pocket money” or “allowance” is considered a rite of passage for many children , but rather than the traditional cash-in-hand options, parents are looking for digital alternatives to support their children’s personal financial management (PFM).

Pocket money is going digital, and it is important to re-imagine and re-develop the manner in which money, budgeting and family-friendly PFM are discussed to ensure that children are adequately prepared to take on the responsibility of having a payment instrument like a card or mobile wallet and can feel empowered by the ability to spend and save money digitally.

Shared view with parents to allow for control

A youth bank account will generally be a joint account co-controlled with a parent or guardian, with a connected debit or prepaid card (physical and/or virtual). There are several app-based services already available in market that are popular with users because of how easily they allow parents to access and monitor their children’s expenditure and savings. Such products may also incorporate interactive content to allow children to be educated in their own time and help them build confidence with managing their own expenses whilst building a solid foundation in financial literacy and financial wellbeing.

The shared view element is also essential as it allows the main account holder full access to view the expenses on the joint account and top it up manually or automatically to emulate the traditional pocket money allowances. To alleviate security concerns, it also allows the parent to set limits, disable spend in specific categories or even freeze the payment instrument in case it has been misplaced or misused.

Having a separate kids account which funds are segregated to, rather than being able to access funds from the main account directly also ensures that there are no risks of children overspending, and with no possibility of acquiring debt or an overdraft.

Some may consider that the pre-teen years are too early to engage with digital banking solutions, but with parents able to monitor their activities, a shared digital banking experience is a safe option where the risk is minimised, conversations can be opened between parent and child and the inevitable budgeting or spending blunders can occur in a safe and understood environment.

Piggy bank and savings goals

Saving is an essential habit we all have to learn, and a main aspect of any financial discovery journey. Piggy banks (even digital ones) are therefore a great way to get kids started on saving. Older children might have aspirations and wish lists, and encouraging them to set savings goals in order to save for the items they want is a great way to cultivate a saving habit. Visuals of their savings progress and in-app nudges help them stay focused and are a great way for their progress to be visibly measurable.

For younger users who might not have wish lists or items they want to save for and buy, getting them to meet a target and filling up their piggy bank is an fun way to teach them how to save money for the future. Within a kids banking app, parents can also get involved by setting different goals for their children based on their ages, understanding, willingness and ability, and help them along the way by encouraging them on their savings journey.

Chores and tasks

Keeping track of assigned chores and pocket money to be given out as a result of completing them, especially if there is more than one child in a household can be arduous. Modern consumers prefer modern solutions, and physical chore charts and the accompanying handovers of cash are no longer a convenient option for many in this digital age. Digital banking solutions can allow parents peace of mind by asynchronously managing chores and allowances for everyone in the family through the same app.

The chores function not only helps parents stay organised by giving them an overview of what chores have been assigned when, it also allows them to monitor progress without micro-managing their children.

In-app personal financial management tools

With family banking solutions offering adult-child bank accounts, it is important to have a robust library of personal financial management (PFM) features and content targeted towards helping them understand their finances and the basics of saving, budgeting and spending.

As children start to manage their own finances with their own payment means such as cards and e-wallets, apps with PFM capabilities are able to provide them with easily digestible bite-sized money management content to develop confidence in their understanding of their personal finances and, in the long term, support their financial wellbeing.

Gamification in educational programmes

Gamification techniques can be used to make personal financial management features and financial wellbeing content fun and engaging to motivate children and create an opportunity to cultivate good financial habits in the long run.

Embedding contextual and personalised gamified money experiences with quests, challenges and avatars, while also allowing users to earn points and level up in their digital banking app is a great way to deliver personalised content in a rewarding and thrilling way.

Gamification techniques offer users the chance to learn in a fun way. This in turn incentivises users to stay the path and keep learning in order to see what else they can achieve as they progress through their journey.

Long term acquisition plan

Family banking allows banks to harness deeper, long term relationships with customers, especially the younger demographic. As children and teenagers start utilising the services of a bank, they develop a relationship with it, and the familiarity with their bank and its products reduces the need for them to look elsewhere for financial services as they grow older. Brand loyalty and continued customer support as a result of family and teen banking solutions is a great way for financial institutions, both incumbents and new digital banks, to contribute to their long term profitability.

Premium account features

Another way banks can make their digital banking services profitable is by launching premium, subscription-based features for their users. Charging for premium accounts is justifiable with the subscription of advanced features unlocking capabilities that basic accounts are unable to access.

While perks such as increased limits or no fee for cash withdrawals, lower exchange rates for international payments and higher levels of customer support (and yes, sometimes also metal cards with exclusive designs) have been traditional benefits of premium accounts, family banking features are an interesting add-on used by banks to justify the extra fees of their premium offerings. When enabled, a customer may typically onboard a given number of children or dependants seamlessly and at no additional cost, each of them with their own payment card and a personalised access to money management features in the app.

Family banking is more than just youth banking

While the focus of many family banking solutions tend to skew towards options for younger users, it should not leave out another key demographic: the elderly. The digitisation of financial services has left many in this group of senior customers behind in the development of digital banking skills and awareness of online financial products and some of the risks associated with them.

The COVID-19 pandemic accelerated the decline in face to face banking and a significant increase in the adoption of digital services across the board. However, this coincided with a growth in online financial crime and banking scams. In December 2021 alone, a regional bank in Singapore reported losses due to scams amounting to about S$8.5 million, with many of these crimes targeting the more vulnerable demographics of online banking users.

Financial institutions should recognise the need to support the elderly with financial literacy and competence in digital banking. Fraud prevention is simply a lot cheaper in the long term than reimbursing customers or trying to recuperate the losses of those victims of banking scams.

Offering support and educational content tailored to the ageing population is an effective way to prevent this vulnerable demographic from falling prey to online fraud. However, a more promising way to manage this issue is to offer services conceptually similar to youth banking solutions where accounts can be co-managed for the elderly banking customers, with the supervision of a trustee or family member who is able to have access to a digital overview of balances and transactions. With that dedicated view, caregivers can be alerted when abnormal transactions happen on the older adults’ accounts and act upon them, or pay a bill which may have been forgotten. This added layer of management and vigilance helps to quickly detect any unusual financial activity such as fraud, scams or even earnest banking mistakes to be spotted and rectified quickly.

Conclusion

Financial literacy is more necessary than ever across all age groups, particularly as increasingly sophisticated and tailored financial products become available to customers. As the digitisation of financial services continue globally, modern PFM features should be made readily available for all users, and personalised to fit the needs of all family members.

Cohesive family banking solutions do not just focus on the youth banking aspect, but should also include older adults as such groups come to terms with the digitisation of banking and navigate the risks and opportunities it offers.

How can Moneythor help?

The Moneythor solution is an orchestration engine deployed between a financial institution’s systems of record and its digital channels to power engaging and tailored experiences for its customers.

With Moneythor, banks and FinTech firms can enhance the digital experiences they offer and power comprehensive family banking features, catering for both young and senior customers and enhanced with personalised insights, actionable recommendations and contextual nudges designed to deepen the relationship they have with their users.

In the deployment of family banking offerings, the Moneythor solution can help with:

• The in-app display of shared account views across all users (parents, guardians, caregivers and their children or dependants) with flexible integration to any core banking systems holding the associated joint accounts.
• The implementation of family-friendly personal financial management (PFM) features with automated transaction enrichment, categorisation, budgeting and more.
• The end-to-end management of savings goal-based piggy banks.
• The development of “chores” features enabling the main users to assign tasks to their dependants in-app with configurable frequency and rewards.
• The deployment of interactive financial literacy programmes with gamification techniques such as quests, challenges, points and rewards.
• And more!

The post A New Digital Era for Family Banking appeared first on Moneythor.