With NAB adopting ApplePay, it’s another positive sign that banks are trying to deliver what customers want, whilst realising they might not be able to deliver that solution on their own. Most banks suffer from legacy tech and can’t make use of the valuable data that they’re sitting on. Their systems were built in another time, most are slow, unresponsive and offer little customer insights, so making changes is difficult. Meanwhile, the fintech sector just keeps on growing

Our team has worked in financial services for many years and we firmly believe banks can get much better at delivering a customer value proposition, if they worked with technologies that helped them understand what their customers are actually looking to achieve and when. We work with financial service providers to help them integrate products that leverage data, and create a more insightful lead nurturing process, with contextual product offerings.

Open banking leading to the data-driven solution

How banks deal with their customer’s financial information is changing greatly as a result of open banking and shared API’s. The Open banking concept is a game changer, giving consumers control of their data by authorising third parties to securely access relevant bank-held customer data. This access means third parties can make payments on the customer’s behalf or provide live transaction information from multiple accounts.  Although delayed in Australia by the Government to allow for a pilot program with the Big Four, open banking will lay the data previously contained within legacy systems in the hands of the consumer, giving fintech providers and banks the opportunity to provide more personalised services, whilst opening up a more competitive marketplace.

Fintech partnerships; what are the opportunities for banks?

Some banks in the UK like Token, Yolt and Barclays have built their own API’s, whilst other financial institutions are building them in partnerships with fintech solution providers who can already make the best use of the data. For consumers, the expectation should be services specifically suited to their profile, and products that are competitive.

If a customer is on a savings account that doesn’t offer the highest interest rate currently available to them, they can be notified which one does. If past credit checks and their current account status makes it likely that they would be able to open a new overdraft or be approved for a personal loan, then that information can be made available to them instantly. Lending offers can be compared and recommended, as can insurance products.

Smarter use of data analysis also means better understanding of a customers spending habits and overall financial situation to assist with personal finance management (PFM), like savings goals, debt reduction or investments. It is these insights that can also potentially help improve financial wellbeing by increasing engagement and awareness. When Toronto based TD Bank partnered with fintech provider, Moven, to launch MySpend; an app that helps with budgeting and real-time expense tracking, they found that the more a user engaged with the app, the less they spent.

All the data at your disposal

Financial institutions gather a lot of data on their customers but legacy tech and systems restrict what they can do with it. The right fintech partners give them the ability to utilise information from instant transaction information, spending profiles, enquiry and credit history, debts and savings patterns, and multiple bank accounts, to create a customer experience that relates directly to their needs and challenges.

Smart data and analytics help collate, organize, and translate that data into actionable insights that can be used to improve a business offering and customer service journey. Banks can then learn the best channels to reach customers and track them at life stages where they’re more likely to require loans or other banking services (such as getting married, buying a home or having a first child).

Legacy tech systems tend to keep all the information you need in disparate locations, making it hard to collate. By centralising customer data and making it more readily available to customers themselves, banks are able to deliver personalised customer value propositions, instead of broader marketing campaigns.

How the right technology helps banks make the right decisions

With networked bank accounts, lenders and financial service providers are able to use that more complete picture of their customer’s financial circumstances, to get a better outcome. Many people have more than one bank account, with more than one bank.

Account aggregation and spending profiles help banks provide more high-value products suited specifically to their customers, reducing the traditional broad profiling by age or marital status.

Data-driven customer success

Developing and launching open banking APIs isn’t just good for the finances of the banking institutions, either. Open banking apps can provide more interactive, convenient, and accessible means for customers to make use of their services and to maintain better awareness of their own financial situation. Research shared by Financial Strength advocate, Jane Barratt, has shown that ‘when someone can access their data, and given access to tools, their financial strength improves’.

Web and mobile-based apps can help customers get a more accurate picture of their finances at any time. The data-driven marketing end of it acts as an information resource for customers. Rather than simply trying to interpret personal loan guidelines for themselves, the latest tech solutions can calculate an approximation of what they’re able to afford to borrow, equipping them with a better idea of what they could apply for, before they apply for it.

Bryan Yurcan nailed it way back in 2016 when he said customers expect everything to be digital and easy. There is so much potential in financial service delivery right now, and room for improvement. Our team is excited to be part of this positive change.

The difference a good partner makes

The Navag8 team have all worked in financial services and financial technology for more than twenty years,  if you would like a demo to see how Navag8 works, get in touch.