With inflation soaring and interest rates on the rise, many consumers face the prospect of their financial health deteriorating. In a bid to help them. consumer banking service providers are looking to offer support through information, product offerings and credit score tools. Over the past few months such support has been especially robust, according to comprehensive research recently conducted by Digital Banking Hub analysts.
“We’ve identified and analyzed a growing trend of providers looking to assist consumers as they navigate financial uncertainty,” says Stewart McEwan, lead analyst on the report. “Our research shows that to provide assistance and guidance, banks and other financial service firms of all shapes and sizes have revamped support content and self-service tools both on their public sites and after login. To help these customers while their wallets are being squeezed, these providers are focusing on how they can support customers in maintaining their lifestyles through spending and bill management.”
The research assessed public-site support information and tools, email communications, in-platform support, planning features and personal financial management (PFM) capabilities, credit score facilities, and other saving and spend-management features. It found that a number of calculators have been introduced on public sites, and pre-existing content has been repackaged to flag support for financial health. In-app PFMs – once a differentiator in the app space – have been rolled out widely to help customers visualize and understand their spending as costs go up.
But the problem with most PFMs, says McEwan, is that they look back, not forward. “What consumers are really looking for is something that’s going to tell them that they’re going to be ‘safe’ for the rest of the month or over the next few months. The financial institutions that are truly differentiating themselves are using open banking to provide their customers a complete view of their product positions across all their providers. This gives them a genuine view of their net worth at any given time.”
As a good example of using open banking effectively, McEwan points to Revolut, one of a number of providers analyzed in the research. “Revolut links external accounts inside its PFM, so it’s far closer to the budgeting tools we’ve analyzed in special money-management apps than to what’s available in the rest of the banking space. In terms of tools that are being provided, they’ve taken it to the next tier.”
Another topic in the research is credit scoring tools, which have made their way onto mainstream banking provider platforms in recent years, putting pressure on specialist service providers. Reporting agencies such as TransUnion have been proactive in partnering with banks and other third parties to present credit scores in-app and online. By offering these services for free within their retail checking platforms, providers are also able to market other products and support.
Because banking, and specifically borrowing, can be a delicate topic to many consumers as they look to maintain their living standard, providers are presenting their products and services thoughtfully. The research found, for example, that most support material – including videos and content – uses reassuring language, similar to that of the early stages of the pandemic.
“We looked at how organizations talk to customers about credit facilities and whether they’ve done so in a responsible way,” says McEwan. “During today’s credit crunch, illustrating how different behaviors affect a credit score and presenting the state of a user’s financial health needs to be as reassuring as it is clear and insightful.”
For further information about the research on how providers are supporting customers with cost-of-living pressures contact sales@curinos.com.
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