Financial institutions are expanding their driven by data financial management help as a response to the cost-of-living challenge.
More than 40 percent of executives in banking feel they have a duty to help customers manage their finances during this economic downturn, according to a new study by open banking industry leader Tink. Furthermore, 45% believe it is their responsibility to make their offerings inclusive and accessible.
In fact, more than half (56%) of the banks polled agreed that offering such support had commercial advantages, including cutting acquisition costs (36%), enhancing customer loyalty and retention (42%), and reducing client turnover (42%).
Consumer desire for customized financial support is significant; 37% of consumers want their banking institution to do more to assist them in managing their finances. Only 27% of the people who were surveyed believe their bank is actively assisting them in navigating the cost-of-living crisis, despite the fact that 49% of them trust their banks more than any other source of financial services.
Although data-driven financial services may have advantages, not all customers are aware of them. About 30% of customers are unsure if their bank provides tools for managing a budget, and 35% are unsure about tools for categorizing transactions.
As UK consumers prepare for continued financial hardship, Tink’s UK & IE The banking sector director Tasha Chouhan said, “It’s heartening to see banks recognize both their obligation and chance in providing data-driven financial products and services to assist customers manage their finances through this difficult economic time.
“Financial institutions should keep funding the development of these services and increase consumer awareness of the available instruments if they want to quicken the pace. To reduce the friction of integrating data-driven solutions into their core offering, institutions can bring them to market at scale through partnerships with fintechs that specialize in money management tools.