The Moneythor solution is powered by real-time data, machine learning and behavioural science techniques to help banks improve functionality and power highly personalised experiences for their customers across digital channels.

As a leading bank in Saudi Arabia and being at the forefront of digitalization, Moneythor’s engine and data-driven personalisation capabilities allow SAIB to focus on customer centricity and to enhance its digital engagement capabilities whilst deepening its relationship with customers by providing them with a more intuitive experience to address their financial needs and goals, both short and long-term.

SAIB’s PFM is the first service in Saudi Arabia providing consumers with a solution that serves them with personalised, contextual and actionable recommendations and insights into their day-to-day finances.

“We are thrilled to be partnering with SAIB for this new service provided to their digital banking users in Saudi Arabia,” said Olivier Berthier, CEO at Moneythor. “We wish to congratulate SAIB on a smooth integration project to deliver best-of-breed customer-first digital banking experiences with enhanced financial wellbeing capabilities, which is a central tenet of our solution. It is a pleasure to collaborate with forward-looking financial institutions like SAIB who share the same priorities, and we look forward to implementing the additional use cases we have in store for local users.”

“SAIB customers deserve a unique digital experience beyond traditional internet banking offering with more data driven digital services, and we enable the customers to understand their financial behaviour and provide them with smart recommendations using our PFM platform, which can support their financial decisions,” said Faisal Al-Omran, the CEO of SAIB.

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To learn more, see how the Moneythor solution can help add modern PFM features to your banking app, read our handy guide to PFM Solutions for Banks or contact our team.

The post SAIB taps Moneythor to roll out intelligent PFM appeared first on Moneythor.

However, when it comes to banking, little personalization has been rolled out so far behind the firewall of online & mobile banking services, despite the huge amount of highly relevant data begging to be exploited. Things are changing though, as it appears to be the next key development for digital banking.

Comprehensive transactional capabilities

By and large, financial institutions world-wide offer a rich set of transactional capabilities through their online channels today, including multiple types of internal and external fund transfers, domestic or international, standing orders, bill payment, remote check issuance or deposit, card services, account opening, trading and more.

Despite the availability and maturity of such a broad set of transactional features, their delivery within a personalized experience has so far been lagging behind. In several discussions with consumer banking executives, various reasons are mentioned to explain that lag, ranging from limited budget and resources to go beyond the initial priority of getting the transactional capabilities right, to lack of skills in the area of personalization or a fear of the regulator and concerns over privacy issues in exploiting too much of the customer data.

Far from neglecting the need for more personalisation, we are now seeing many bankers acknowledging that analytics to better understand customers’ financial behaviour and the ability to turn these into enhanced digital services are a key investment priority in the year ahead.

Marketing behind the firewall

Analyzing personal and transaction data gives banks the opportunity to understand customers’ needs today and anticipate future ones. Personalization then adds the ability to deliver those insights to customers in a contextual manner. The most obvious application of these techniques, and the one directly inherited from the e-commerce pioneers, is to increase sales targeting and effectiveness.

A low balance with upcoming bills might call for a personal overdraft offer, a high balance on a current account might suggest appetite for a fixed deposit, recurring visits to the mortgage loan information page might indicate plans to purchase a home, a frequent traveller may be interested in a travel insurance, a fine dining lover might appreciate discounts at a popular restaurant, etc. The opportunities to leverage customer-centric data analytics and personalization for targeted cross-selling or merchants-based campaigns behind the firewall are numerous.

Personal finance advisory

While there is a clear opportunity to drive business from the online channels, it is also crucial for banks to avoid limiting the benefits of personalization to achieving pure sales & marketing objectives. The risk of alienating the customer with too many ads and offers, however clever they might be, is significant.

Personalization presents a unique opportunity for a bank to delight its customers with proactive and intelligent online advisory. It is also the ingredient largely lacking from most of the first generation personal finance management (PFM) tools to improve consumers’ financial performance.

Beyond the need to deploy the right technology to enable personalization, maintaining the right balance between marketing messages and unbiased money management advices is a key challenge which banks must not underestimate. Even more so for global financial institutions operating in countries where local culture and preferences might move that cursor of interest and acceptance differently between both.

Not ending up being plain creepy is also a prominent challenge of any implementation of personalized financial services. But doing nothing to make their digital services more relevant and personal for fear of doing too much is not an option either for banks these days.

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Social media, yet another data play

At the core of social media is the ability for users to exchange and create information publicly (and arguably behind the boundaries of a corporate firewall too). Whether or not this flow of information is directly actionable in a banking context, there is no denying that it is real and here to stay.

The first aspect for banks to fully appreciate is how massive the information exchange and media creation are. Building a capability to collect and evaluate a multitude of data points and information streams is likely to be the first milestone to achieve by a bank before it can extract any benefit from social media channels. So, yes, most likely yet another candidate for the Big Data buzzword.

To paraphrase (or rather contradict) Dilbert, a significant part of any social media manager’s job is unlikely to be only about using the words “Facebook” and “Twitter” a lot, but instead have more to do with massaging huge amount of data.

Enabling a wide range of activities

To try and assess the real impact of social media on the banks’ business, it is worth looking at the typical activities those social media data flows enable them to conduct:

• Monitoring: an accurate measurement of social media signals enables sentiment analysis around the bank’s brand and its products, and also competitive intelligence, the identification of prospects or a better understanding of its existing customers.
• Participating: addressing customer satisfaction issues as well as running financial literacy & learning communities are the most common way for banks to enter the dialogue.
• Publishing: one-way broadcasting of PR and advertising is perceived as a low-hanging fruit and often treated as little more than a new distribution channel for information and campaigns, albeit more and more tweaked to try and implement some viral components.
• Crowdsourcing: using the collective input of the masses to help design new products and services is promising, but so far limited to the veneer of products (debit & credit card design being a typical example). The regulatory hurdles of launching real new banking products are unlikely to enable full crowdsourced products but a good level of customisations is likely to be achievable.
• Transacting: enabling smooth peer-to-peer payments is the typical candidate on the transactional front but obviously one of the toughest to implement, with very few successful initiatives thus far.

Aligning with the value chain

If done holistically and with the right dose of C-level committment, social media activities seem to be able to contribute at practically every step of the value chain for banking products. Assessing social media from a product lifecycle management perspective is an interesting way to measure its potential end-to-end benefits:

1. At the time of idea generation, by monitoring trends and sentiments, feedback and ideas,
2. In product design, by crowdsourcing popular features or by conducting relevant competitions,
3. Upon implementation, by increasing productivity between the bank, its suppliers and its early adopters with more efficient communications,
4. In marketing activities, by broadcasting to multiple channels including videos, blogs, short messages on multiple platforms to increase reach and virality,
5. In sales, by lowering costs and increasing efficiency thanks to additional proximity to the customers and a more seamless ability to buy products across multiple platforms.
6. And finally in ongoing customer support, by providing more transparency in addressing queries.

The last bit is not without challenge though. Emphasising online interactivity comes with a certain loss of control and banks together with the regulators don’t like to lose of control.

Collaborative banking?

While enforcing that the same security and privacy policies as for other channels are firmly in place (another key challenge), social media can also lead banks to explore new usages, like community-based or collaborative banking products.

At this point, community features behind the online banking firewall within personal finance management functionality have not delivered on their promises. Comparing one’s spending in a category to her peers is largely perceived as a gadget with no call for action and hardly a feature which will make the customer come back.

On the other hand, collaborative banking could be seen as a relatively seamless evolution of the traditional joint account. Tracking, sharing and/or contributing to families or friends’ goal-based savings accounts is a prime example, initially pioneered by companies like SmartyPig but with unclear traction to this day. Are customers ready to socialize what has traditionally been considered personal account information or are they still reluctant to mix banking with social activities? The jury’s still out on this one to fully understand the opportunity around collaborative banking.

However, as much as we like to debunk buzzwords and enjoy a contrarian point of view, social media is without a doubt a key part of the world banks operate in today. Collecting and analysing social media data and looking at incorporating its signals in its product management policies do not seem to be an option anymore, whether or not the bank is planning to boast a full-blown social media strategy.

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By the look of it, we are past the point of considering that mobile banking would face a risk of not gaining traction because of security issues. These were the original concerns raised in the early days of internet banking adoption and those were alleviated. So mobile is here and mobile is big but will mobile kill the desktop in the delivery of financial services?

To begin, let’s exclude geographies where mobile devices are king because of poor infrastructure, limited penetration of personal computers and broadband. Mobile banking is not just a winner but the only option in these situations.

Tablet: mobile or desktop or both?

And where do tablets fit in the mix by the way? They clearly represent a significant and growing percentage of online banking usage. Data from Tealeaf in their digital consumer survey show tablets being used to conduct banking activities across all age groups by an average of 7% of users via the banks’ websites and 6% via an app (against averages of respectively 16% and 18% in for smartphones).

In terms of category, tablets map to both mobility and home-based usage where they are often treated as ‘couch devices’. It is therefore critical to track tablet usage separately and to avoid bundling them with mobile and draw the right conclusion when it comes to assessing mobile vs. desktop-based online banking.

Small screen or big screen

The screen real-estate is one of the obvious factors influencing the customers’ preference for one type of device against another. Looking at the perception of different age groups is a clear driver for such preferences. For example, in a report by PwC Australia, 52% of baby-boomers (45 years old and up) said they would not consider using a mobile phone for online banking because they prefer using a big screen for these activities.

But, beyond age groups, we need to acknowledge that some things just don’t work well on a small screen today. Let’s take an example with one of the standard personal finance tricks of paying bills as they arrive, and let’s assume that online banking will be used for that purpose. If the biller sends the invoices by post, the desktop (or tablet) is in its home territory and is likely to win the user over. On the other hand, if the bill notification is sent via email, the process on a smartphone looks like the following (real example in a developed market like Singapore):

Open the email message, if it is a basic notification with a link to the biller’s website, follow the link, move to the web browser, log on to the biller site, find the bill, review the details, memorise the amount to pay and reference number, switch back to the home screen, find the mobile banking app, open the app, log on, in many cases find the necessary token or select the SMS-based authentication, get the SMS challenge from the message app and input it in the banking app, reach the bill payment functionality, select the biller, type in the amount and reference (what do you mean “you forgot the amount you had to memorise earlier and need to switch back to the biller website”?? And don’t get me started on the user-friendliness of the average smartphone’s copy & paste functions…), submit the details and sign out.

If the email notification was containing a PDF attachment, a few of the steps above could arguably be skipped but the overall pain of the process would not have been significantly lessened. At pretty much every step of the way, any sane user is likely to stop such a painful multi-app, multi-touch and overall cumbersome user experience, and instead park the notification email and wait to be back in the comfort of the office or home desktop to pay the bill.

Blame it on the awkward multi-tasking abilities of smartphones or the poor bill payment functionality of the mobile banking app or the lack of integration in a national billing scheme, but the truth is that even for relatively simple and granular actions, the mobile experience can sometimes be dreadful today.

Quiet-time or always-on banking

That being said, moving on from screen real-estate, there is also more to banking than bill payment or other quiet-time activities like financial planning, tax preparation or various analytics favouring a large desktop or laptop screen and a fluid multi-tasking environment.

It is hard to beat mobile devices when it comes to a quick balance check on the road, real-time expense tracking, mobile payments or location-based commerce, or even any activity leveraging the combination of portability, camera and network connectivity for things like remote deposit capture.

Beyond real-time, the always-on ubiquity of the mobile device is also a key factor in selecting it to conduct banking activities. Comscore has published some interesting data on consumers’ device preferences throughout a working day, highlighting the popularity of mobiles to brighten the commute while desktops / laptops dominate the day and tablets prevail at night.

Winning with all channels

The different suitability of mobile and desktop user experiences depending on the selected banking activity, the importance of the location, the distinct advantages of real-time vs. long-running processes, and the mere evolution of daily preferences driven by other more prominent activities all point to the complementarity of the mobile, desktop and tablet channels.

What’s more is that users of mobile banking seem to actually interact more frequently across all channels than other banking customers, as highlighted in the PwC study with data from the UK. Far from cannibalising other channels, mobile banking would actually seem to help increase the frequency of interactions with the bank. Time to delete that ‘vs.’ in the title of the post.

Bottom line is that, like banks should probably not close all their branches just yet, it might be a good idea not to kill or even stop investment in the desktop just yet either. Dumping other forms of online banking and going all-in with mobile is not really an option for banks yet and probably ever. A true omni-channel and balanced experience across devices and across use cases is a lot more likely to address customers’ expectations.

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But that relationship is also laden with paradox. Despite the apparent breakdown of trust in financial services brands, report after report from around the world show good satisfactions of customers in their banks.

Decent satisfaction… but appalling loyalty

According to the World Retail Banking Report by Capgemini, customer satisfaction has reached a respectable global average of 65% in 2012, with regions like North America leading at 80% and banks in Asia Pacific trailing at 53%. However, attempts at gauging loyalty of the same customers shows worrying results with only 50% of customers confident that they will remain with their primary bank over the next six months.

Customer Satisfaction with Primary Bank (%) by Region, 2012 – Source: 2012 Retail Banking Voice of the Customer Survey, Capgemini

Needless to say that customer loyalty in banking, as in any other industry, is of paramount importance, particularly in a time when banks desperately look to generate revenue. The lifetime value of loyal customers is significantly higher as they buy more banking products in support of the key events in their life. They also generally cost less to serve and naturally act as customer advocates.

Lack of trust… but likely acceptance as infomediary

The dreadful level of trust and confidence of consumers in the banking industry hides another paradox. When asked which party they would trust as a guardian of their personal digital information – or infomediary, guess who comes significantly ahead of social medial sites, telcos and even governments? Banks, of course. This is one of the interesting results of a recent report by Cisco IBSG, where banks were chosen by 42% of the respondents as the most qualified organisation they would be willing to use for a digital footprint management solution.

The optimistic way to look at these paradoxes is to believe that things can be fixed.

Increasing loyalty through financial advisory

In recent years, increased competition and fear of commoditisation (more than the image crisis of the banking industry) have been powerful drivers for banks to focus on customer satisfaction. Improvements such as extended branch opening hours or making sure that customers can accomplish a complete range of everyday banking activities online are laudable efforts. But they might not give banks that extra edge required to trigger a real increase in customer loyalty.

One obvious approach is for the banks to go the extra mile when customers face accidents of life, big (like losing a job) or small (like reverting a fraudulent transaction). Delighting customers upon those high-stakes moments, when the true meaning of “being here for you” is tested, is clearly key.

Building a long-term strategy of ongoing multi-channel assistance to customers might be a more powerful method though. Offering regular personal financial advice from experts who care, with no artificial gee-whiz factor, might be the best way to keep customer from switching. And the online banking service is a natural and cost-effective channel to deploy this value-add financial advisory.

And, beyond increased loyalty, what better way for banks to drum up some much needed customer trust and to improve public opinion than to fulfil their social role and responsibility as financial advisors?

The post Retail banking customers’ satisfaction does not mean loyalty appeared first on Moneythor.

Most of the data on the subject is US-based so far. Analysts from Celent said some time ago that only 3.8% of all online banking users are active users of PFM solutions, the Federal Reserve said in a 2012 report that 21% of consumers currently use a PFM tool while Aite Group believed it’s a tad higher at 27% and Javelin concurred with 21% using a mix and match of PFM tools, from traditional money management software or spreadsheets to online banking and third-party services.

There is little public data about the rest of the world’s relationship with PFM today, largely because the deployment of related online tools, whether embedded into online banking or standalone, is in a more nascent stage and simply because of limited analyst coverage. However the glass-half-full consensus is that there is certainly room to grow PFM adoption everywhere.

Lipstick on a PFM

Let’s save security concerns and the trust issue of using third-party services for another blog post and focus on the PFM solutions provided by banks for now. One of the key reasons cited for the lack of adoption is the absence of a common user experience with traditional online banking capabilities. Relegating PFM to another tab and failing to connect its capabilities to key sections of online banking like transaction details and statements clearly don’t help. So usability and design tricks are called to the rescue to better connect the two. Excellent.

Other reasons include the need for banks to do a better job at marketing the PFM tools, with banners and splash pages on the public web site, proper education of both customers and staff and other multi-channel tactics to raise awareness of the new capabilities. Right on.

All good reasons but do these try to address the root cause?

Money Management for the Masses

PFM tools in most of their current incarnations are basically an online port of traditional money management tools like the venerable Quicken or Microsoft Money. This approach assumes that consumers want and even like to manage their money and allocate a significant amount of their spare time to keep track of their finances in great details. The truth is that generally, beyond money management hobbyists, they don’t.

At Moneythor, we contend that an important way to increase adoption is to cater for the very large budget-averse population, for those who never cared about Quicken or Microsoft Money, for people who want to make sure their finances are on track, their bills paid and their savings in order with no effort, and certainly without a regular deep-dive into the tiniest of their expenses.

“Don’t merely throw pie charts at us and don’t ask us to set detailed budgets before we can get any value from the tool, try first to detect automatically things which are likely to be relevant to us based on our spending patterns and give us actionable recommendations or at least food for thoughts to help us improve our finances” shout the masses.

All in all, PFM functionality should simply get out of the way. It needs to truly blend with standard online banking capabilities to deliver automatically the right dose of clever alerts and financial advisory to users. Again, let’s not start the discussion by asking consumers to work but let’s assist proactively and educate softly instead.

What do you think? Do you feel that personal finance management should feature as an activity on its own in consumers’ daily routine or get slightly more subtle and non-intrusive to attract more users and solve that adoption conundrum?

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