Personetics, the international provider of financial data-driven personalization and customer engagement solutions for financial institutions, has announced (what it claims to be) the first suite of “Proactive Cash Flow Management” capabilities “to help banks face the growing competitive, regulatory and consumer requirements to combat overdrafts.”
As noted in the update, the overdraft landscape in the US is at “a watershed moment, with leading banks announcing changes to their overdraft offerings in recent months, including scrapping fees, extending grace periods, or providing short term loans.”
Personetics’ Proactive Cash Flow Management capabilities “are the first to enable banks to act proactively to address overdraft situations, not just reactively.”
By analyzing customer transaction data and cash flow patterns, banks “can understand customers’ situations, accurately predict when an overdraft might occur, and proactively offer treatment options that address customer-specific needs.” The treatment approach “is tailored to the customer situation and likelihood to overdraft.”
By proactively engaging customers on cash flow issues, banks “can reduce the number of overdraft and negative balance situations and build stronger relationships with customers, leading to higher customer satisfaction and loyalty.”
Personetics Proactive Cash Flow Management capabilities are comprised of the following:
- Customer Enrichment: determines the customer profile to help banks understand each customer’s unique situation and root causes of overdraft. Customers may fall into one of four personas:
- Paycheck to Paycheck: customer’s income may be volatile or barely enough to cover expenses.
- Hardship: customer has experienced a recent financial hardship such as income loss or significant expense
- Mismanagement: customer has mismanaged the timing of their deposits or payments during a sensitive cash flow period
- Affluent Mistake: customer has plenty of funds deposited overall, but mistakenly has gotten into an overdraft condition on a particular account
- Cash Flow Prediction: Identifies likelihood of customers to incur an overdraft situation and the likely timeframe. Personetics’ Cash Flow Prediction model has proven accurate in predicting 70% of overdraft situations.
- Tailored Treatment: Personalized insights offering treatments to address the potential overdraft condition.
Jody Bhagat, President of Americas at Personetics, remarked:
“For a long time, overdraft fees have been ‘in the shadows,’ viewed as a penalty fee disproportionately applied to those who can least afford to pay. We applaud the industry’s rapid response to lessen penalty fee impact, but there remains an even bigger opportunity moving forward.”
“The next stage is for banks to leverage advanced data and analytics and proactively engage the 4-6% of customers who overdraft on a monthly basis. This means using advanced data and analytics to better understand the individual customer and offer personalized treatments that avert the overdraft condition and improve their financial well-being. Progressive banks all over the world are seeking new ways to help customers with their money management. By adopting a data-driven, personalized approach, banks can unleash their creativity in delivering tailored solutions and treatments that put customers’ financial wellness at the center of the experience.”
As mentioned in a release, Personetics is “the global leader in financial data-driven personalization, customer engagement, and advanced money management capabilities for financial services.” The firm is “creating the future of “Self-Driving Finance,” where banks can proactively act on their customers’ behalf to help improve their financial wellness and achieve financial goals.”
Their data analytics solutions “harness customer financial transaction data to provide day-to-day actionable insights, personalized recommendations, product-based financial advice, and automated financial wellness programs.” They offer solutions “for mass market consumer banking, SMB banking, wealth management, and credit card issuers.”
They “drive business impact for financial institutions by improving relevant product targeting for accurate, efficient cross-selling and upselling.” They “help financial institutions deepen their customer relationships, increase core deposits and customer retention, expand share of wallet, and boost Customer Lifetime Value.”
Personetics currently “serves over 80 financial institutions spanning 30 global markets, reaching 120 million customers.” They are reportedly “backed by leading venture capital and private equity investors, with offices in New York, London, Tel Aviv, Singapore, Rio de Janeiro, Tokyo, Paris, Madrid, and Sydney.”