Personal Financial Wellness- The Importance of Data Driven Intelligence
If you’re a college graduate or have recently graduated from college, you have likely spent a good deal of time worrying about how you’re going to pay off your loans. While your generation, Millennials, who make up the majority of the digital banking population, are learning more about their financial health, investing their savings and spending smarter, implementing these strategies is a struggle.
With all that in mind, financial institutions have a prime opportunity to help Millennials map out a savings plan that can improve their overall financial wellness.
In a day and age where 90% of Millennials check their smartphones within 90 minutes of waking (Deloitte), it is essential for financial institutions to offer highly relevant and personalized digital solutions to them. Particularly, through the use of artificial intelligence and machine learning. In a study conducted by Aite Research, 75% of consumers aged 22 to 49 years demonstrated a significant interest in a virtual financial wellness application that could help reduce debt, achieve savings goals and better track finances. In addition, 80% of this age group were also willing to share their information for tailored insights, guidance and advice. In essence, millennials would come to financial institutions that offered them such solutions, and would stay for the actionable insights tailored to their needs and benchmarked against their peers.
Here are some simple steps that retail banks can take to guide Millennials better.
- Create Data-Driven Consumer Profiles: Find out who the consumers are, what their needs are, and how best to help them, by analyzing their income, spending patterns and loan debt.
- Provide Contextual and Personalized Education: Provide education specifically tailored to each user by finding out their current state and what they must do next.
- Determine the Best Approach to Providing Personalized Financial Education: Approach the consumer with both top-down (providing contextual expert recommendations to consumers based on their financial situation to best prompt them to take action) and bottom-up (leveraging AI to provide data driven insights to optimize day-to-day spending) processes.
- Consider Incorporating Additional Analytics: Show statistics about their peers in the same age range, location, income and spending pattern, debt loan etc. (peer benchmarks) and convert it into useful, actionable tips for the consumers.
In this way, the more Millennials can personally relate to and identify with the data that is constantly thrust upon them, the more likely they are to make more informed financial decisions.