A few weeks ago we sponsored a webinar titled “How to Engage the Financially Fearful” featuring thought leaders in the digital finance and FinTech sectors in Australia and New Zealand. While the focus was on strategies for helping at at-risk consumers improve their financial wellness during these uncertain times, the panel offered insights that are applicable to all customer segments within financial services.
The following insights represent a conversation featuring:
• Zhi-Ying Barry, Senior Analyst with Forrester
• Bill Parsons, Group President, Data & Analytics, and International for Envestnet | Yodlee
• Fred Schebesta, Chief Executive Officer for Finder
• Travis Tyler, Chief Product and Marketing Officer role at 86 400
1. COVID-19 is accelerating the importance of helping Australian consumers improve their own financial well-being.
“Australian consumers are very concerned about how they’re spending their money and the state of the economy,” noted Zhi-Ying Barry. “As a result, consumer household saving has risen by almost 20%, which is the highest rate since 1974, while consumption levels have dipped.”
This is leading Australians to seek out financial providers that can do a better job of helping them manage their money.
2. COVID-19 is accelerating digital adoption across financial service sectors and age groups.
Not only is digital adoption happening across the major financial services sectors – investing, digital banking and digital payments – but it’s also happening with age groups besides millennials. Barry cited recent Forrester studies that found the median age of customers most willing to switch or change banks to get access to digital tools was between 30 to 45 years old.
3. There’s a growing interest in digital tools to improve financial well-being.
Australian consumers are embracing digital tools to help them manage and invest their money, with almost a two-fold increase from previous years. However, Barry cautioned “it’s not just about any tool for any customer”. It has to be “relevant to their financial situation and part of a broader experience that makes consumers feel valued by their service provider”.
Said Travis Tyler,“ With any interaction we ask what’s the core job to be done here? What can we digitize? And how do we bring humans into the process? You need to look at the entire end-top-to-end journey.”
4. “Value for value” exchange is critical for engagement. especially among fearful consumers.
Bill Parsons offered that “consumers will drop their fears and engage on a journey of financial health as long as their getting value for value”. Tyler agreed, citing the now widespread adoption of Apple’s facial biometrics for data authentication. “For me, if you get the experience right, there’s an exchange of value and people will overcome their fears and concerns.”
5. “Tap n’ Pay” culture has consumers yearning for control.
10 years ago, we averaged 30 transactions a month. Now it’s not unusual to have 300 to 500 because of the ability to “tap n’ pay”. We’ve never had so much money taken out of our accounts with so little visibility. “We’re losing touch with our spending,” noted Tyler. “So having a service that helps you understand, and take control is important”. Fred Schebesta also believes control is key. “What we’re building now is giving back control to the customer, “ he notes, “and I believe that’s ultimately going to be the lynchpin.”
6. Peer benchmarking helps consumers get comfortable with digging into their financial numbers and taking the next step.
Parsons noted that “if people feel like they’re the only ones spending a certain way or a certain amount, they can be fearful and not engage. But if you use peer benchmarking, you let them compare themselves to others and they start to feel they’re not alone in this financial world.”
BONUS: Positive enforcement is a key element to remember.
“The last thing you want to do is make someone feel bad their money, especially when they take that first step,” said Tyler. Parsons reinforced this concept. “Let’s give them something positive, something to look forward to, a goal they can hit in the next 30-45 days, then set another goal, hit that, and build from there,” Schebesta summarized this sentiment by noting “Achievement is a massive motivator. Reframing things as “Go You” is something the entire financial service industry should do”.
For more details and additional insights, we invite you to learn more about Envestnet | Yodlee’s Financial Wellness Solutions.