How Back Office Innovation Will Transform Personal Financial Wellness

At the recent Center for Financial Services Innovation (CFSI) EMERGE Financial Health Forum, I was honored to be part of a panel on how “back office” innovation is required for financial institutions to fully engage with their financial wellness initiatives. Moderated by John Thompson, Senior Vice President at The Center for Financial Services Innovation, Brad Hanson, President of Meta Bank, and I had a robust discussion on the challenges with back office innovation given the practical limitations of budget and resources, as well as dependencies on legacy core systems and providers. During the panel, I shared Envestnet | Yodlee’s perspective on working with financial institutions on their Personal Financial Wellness strategy and implementations. For years, delivering a powerful personal financial management solution (PFM) consisted of providing consumers with basic budgeting, spending and tracking tools. While many PFM users found these tools useful, many more are still left searching for more personalized and predictive solutions to help them better understand and manage their personal financial wellness. However, few institutions have been able to fully capitalize on personal financial wellness or PFM solutions due to technical and risk-related back office concerns. The primary technical blocker is integration challenges between the various siloed systems that make it difficult to obtain a single view of the customer in an efficient manner, as well as the ability to get that data to the front-office in a usable way. Risk related concerns include privacy questions about the use of this information as well as the legal and regulatory requirements. Even though we are in the age of “big data,” many financial institutions find it challenging to deliver a reliable report of customers with non-sufficient funds (NSFs) to their branch personnel in order to offer overdraft protection in a consistent fashion. Given this current state of back office capabilities, how can it power a meaningful personal financial wellness program? It is essential that the personal financial wellness program include stakeholders from the back office, including technical, privacy, security, and legal representatives. As with any data-driven initiative, data flows and use cases should be shared so that these stakeholders’ requirements and expectations can be captured. These teams do not want to be the “Department of No” but are often forced into that role due to resource and timing constraints. Help them help you by looping them into the project early on, ideally during the business requirements phase. While speaking on stage at EMERGE, I was enlightened by another thought. The back office needs to do a better job of informing their customers about its current capabilities; both to set reasonable expectations and to advertise new services. At Envestnet | Yodlee, we have embraced Development Operations (DevOps) and are evolving our own back office to become more efficient, cost-effective and compliant using a DevOps model. We have spent a great deal of time and effort building a global implementation that meets all the requirements of internal stakeholders. However, until a chance encounter between VPs of Operations and Engineering, none of this was known to our front office. This encounter kicked-off some internal discussions and presentations, ultimately leading to major improvements in the delivery of our data analytics and, ultimately, personal financial wellness capabilities. With this, we learned that the back office needs to also engage the rest of the business as much as be engaged by them. How you do this will depend on your organization and culture, but it must be done for any financial institution to fully engage on a data-driven personal financial wellness program. Ultimately, financial institutions need to overcome the cultural mindset and workplace silos that keep different banking functions from sharing information with each other. Successful providers of personal financial wellness solutions understand that their biggest competitive advantage — and the key to retaining consumers — is having an intimate understanding of their financial wellness. With improved data aggregation, AI models, and predictive and prescriptive analytics, financial institutions can provide smarter, more personalized financial wellness solutions that deliver the actionable suggestions and guidance that build long-term trust and loyalty. To learn more about how to create more engaging financial wellness solutions to drive customer loyalty and engagement, register for this on-demand webinar.