Traditional Money Management Tools Fall Short of Client Expectations: Report

Personetics, the global leader in financial data-driven customer engagement, released a report titled “Spotlight on North America: Banks and Credit Unions Need to Promote Customers’ Financial Well-Being.”

The report, based “on a study conducted by Forrester Consulting on behalf of Personetics, details the opportunities and challenges associated with enhancing customer engagement and loyalty and increasing customer lifetime value.”

Jody Bhagat, President of Americas at Personetics, said:

“As this report shows, traditional PFM has not delivered, full stop. Customers expect banks to know their financial situation and deliver exceptional experiences to improve their financial well-being. This requires banks to embrace advanced money management tools and deliver proactive, intelligent interactions that customers value. These interactions, in turn, drive higher customer engagement and perceived value, leading to more satisfied customers and stronger business outcomes.”

Personetics commissioned the report by Forrester, whose experts “based their conclusions on interviews with banking and credit union decision-makers in digital and business strategy.”

Key findings across North America:

  • Banks and credit unions expect strong business outcomes.
  • The top three key performance indicators respondents use to measure value are:
  • Customer engagement with tools (62%)
  • Customer digital engagement (49%)
  • Customer retention (45%)

Most existing, traditional PFM tools fail “to deliver tangible value for customers.”

With half of banks and credit unions struggling to leverage financial data and technologies, only a few customers are “using their digital money management tools.”

Many solutions follow “a one-size-fits-all approach, putting too much workload on the customer.”

A striking 88% of respondents say “that fewer than half of their customers actively use these tools.”

Only 59% of respondents said they “provide sufficient personalized financial insights and advice based on customers’ financial data.”

Only 54% use digital technologies “to create smart nudges (e.g., proactively alerting customers the risk of overspending/overdrafting or opportunities to transfer money towards a savings goal).”

Technology challenges persist.

Many banks and credit unions “lack an effective method of assessing and prioritizing the right technology or technology partner.”

  • Nearly half (47%) of respondents say “they lack the right technology for their digital money management and personalization program.”
  • 41% struggle “to select or prioritize the right tech stack.”
  • 42% say they “lack suitable third-party partners.”

Customers expect banks and credit unions “to provide personalized interactions that inform, guide, advise, and support their finances.”

The financial institutions that “provide advanced money management solutions that meet those needs will generate significant business impact – increasing revenue, profitability, and customer lifetime value.”

To do this, financial institutions need “to craft an enterprise-wide financial well-being strategy, invest in advanced tools, adopt a data-driven approach, and proactively deliver solutions that customers need, when they need them.”

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