Building upon a successful relationship and in the wake of continued collaboration and success with BNZ to augment and diversify their digital banking offering, Moneythor is privileged to have been a part of the implementation of this innovative Personal Financial Management (PFM) solution that leverages data-driven personalisation to create robust financial literacy content, actionable insights and innovative expense tracking tools to support users in their financial wellbeing journey.

Tracking and categorising spend

One of the highlights in Activity is the expense tracking tool. This interactive functionality allows users to track their expenditure across multiple accounts to understand what expenses they have made and monitor their daily, weekly and monthly purchases over any chosen period.

All transactions are instantly categorised, giving users a better understanding of what they are buying. And there is also the option of relabelling the categorisation and changing expenses to a more appropriate category, which will then be remembered and applied automatically for future transactions.

Managing cashflow

Created with a focus on convenience for existing customers, Activity also offers users a real-time record of managing their cashflow and a holistic overview of their finances.

Users are offered the option of viewing their weekly and monthly balances to give them a better understanding of when there is an excess or shortage of funds in their account to allow for better financial planning.

A key feature here is also the ability for customers to set targets for the cash surplus they aim to finish a pay cycle or a given period with. This innovative and personalised approach to promoting good saving habits is an important contributor to improving the bank’s customers financial wellbeing.

Comparing expenses categories and insights into expenditure

With expenses being categorised, customers can dig into any category to see how their spend compares to the previous period.

Activity allows users to compare up to five categories at the same time, and see what expenses are the most significant to make comparisons. A ranked list also provides a summary of top merchants at the end of every cycle.

With these actionable insights and financial wellbeing tools, Activity enables BNZ to create a more comprehensive and encompassing digital banking experience for its users.

Congratulations once again to BNZ for being recognised as a winning digital product and leading the way with promoting financial wellbeing for users in New Zealand. We look forward to further collaboration and creating seamless customer experiences together in the future.

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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.

Moneythor’s behavioural science series, a four-part collection of blogs, is based on interviews held with Klaus Wertenbroch, a renowned expert in behavioural economics and consumer-decision-making. In this series we will be delving into the topic of behavioural science in financial services, it’s benefits and pitfalls, the impact it can have on the financial wellbeing of customers and the role it will play in the future of banking.

Part 2 – The Benefits and Pitfalls of Behavioural Science in Banking
 

Part 3 – How can Behavioural Science Improve Financial Wellbeing amongst customers?

 
Financial wellbeing is a topic of growing importance in the financial services space. Many banks are now providing tools and advice that support customers and help them lead healthier financial lives. The benefits of this are numerous: not only do financially secure customers save and invest more, but they also tend to be more profitable customers for banks. Coupled with the application of behavioural science principles, these tools can deliver experiences that improve customers’ financial decisions and therefore their overall wellbeing.

How can behavioural science encourage better financial wellbeing amongst customers?

 
According to Wertenbroch, one of the advantages of applying behavioural science to financial services is that “behavioural science has shown how people’s actual behaviour deviates from the norms of rational choice in economics. Thus, people make systematic mistakes that prevent them from achieving optimal outcomes for themselves. Those mistakes are hardwired into human cognitive processes.” For banks, understanding the limitations of human decision-making is one of the first steps in building experiences that promote financial wellbeing and encourage effective financial decision-making.

Building on the idea of encouraging better financial decision making, Wertenbroch notes that it can often be the small points of friction that have the biggest impact. “One major challenge is that it is often seemingly insignificant, small obstacles that prevent customers from making financial choices that could yield big payoffs in the long term. These small obstacles, such as complicated login processes or overly complex designs of websites, may seem negligible when it comes to financial decisions, but they create so-called friction, which blocks customers from checking their accounts more frequently or from getting started with saving for retirement.”

He adds “customers simply don’t make optimal trade-offs between the small current effort required to overcome small obstacles and the much larger future benefits”. He notes that this is because of present bias, which is the tendency of people to discount their future preferences in favour of more immediate gratification.

In order to overcome these issues, banks can encourage better financial decisions and choices by “recognising and removing friction points from the technology platforms, on which customers interact with banks,” noting this as an important aspect of integrating behavioural science techniques.

How to leverage friction points?

 
While friction can have a negative impact on customer decisions, it can also be used to provoke positive behaviours from customers. “The idea of friction can also be used to discourage customers from making choices that they may later regret. For example, as credit card customers get closer to their credit limits, they could be sent an extra message on their phones that reminds them of their current balance and their remaining credit and that requires them to tap a button to approve the purchase. This creates a small amount of friction to prevent consumers from making a potentially harmful financial choice.”

When it comes to customer wellbeing in financial services, behavioural science tactics and principles when used correctly, can enhance the customer experience and guide customers to make better financial decisions and choices.

Check out part 4 of the series here

About Klaus Wertenbroch

Klaus Wertenbroch is a Professor of Marketing and Novartis Chaired Professor of Management and the Environment at INSEAD, one of the world’s leading and largest graduate business schools. Wertenbroch is an expert in behavioural economics and consumer-decision-making.

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