Gone are the days when banks could turn their customers into savers merely by offering good rates on deposits. As the demand for personalised digital banking services is getting higher and higher, the one-size-fits-all approach doesn’t work that well anymore. If at all. What more and more customers need are savings and investments solutions that are tailored to their exact needs, along with expert advice, education, motivation and rewards.
While individual approaches to savings differ, a lot of people share the same concerns about their financial health. Approximately 61% of Europeans worry about not having enough money for retirement. In fact, saving for retirement is the primary financial goal in all key age groups. It’s also alarming that 27% of European and US households have no savings at all. Surprising, however, it is not: 1 in 5 American adults spend more time planning their vacations than managing their finances.
But they’re open to suggestions. Especially when those suggestions come from their banks and help them better manage their finances – also via digital channels. Some of the most common types of advice retail customers are seeking from financial service providers have to do with investments (41%), retirement (38%) and saving for a large purchase (27%). Let’s see some examples of how banks can meet these needs and personalise savings offers and advice using data-driven customer insights.
Spot savings opportunities
Many customers find it difficult to identify savings goals, be they long-term retirement plans or not-so-distant events, like an upcoming holiday or buying a new car. Savings advice is best given as part of more complex money management functions that include budgeting tools. Offers can be included in notifications about existing savings or investments, such as term deposits that are due to mature soon.
This much is safe to save – This tool helps banks calculate how much money is available for customers to save each month based on the analysis of their account balances. Customers can check how much they can save using a specific widget in their mobile app.
Help customers set up smart saving goals
Smart money management tools using data-driven customer insights can suggest potential savings for a range of goals based on customers’ spending habits and recurring payment transactions. Remember: customers expect specific suggestions, but they also want a high level of flexibility in terms of options.
Save for your next holiday – Partially based on past transactions during earlier trips, this insight allows financial institutions to predict if a customer is preparing for a holiday and suggest possible savings goals related to the upcoming trip. Knowing how much they actually need to save for the next vacation can help customers with their overall budgeting efforts.
Keep an eye on transactions
Certain transactions that point to significant changes in a customer’s future income can trigger specific actions from their bank, such as creating tailored savings offers or investment advice.
Put your bonus into savings – Banks can easily detect when customers receive a larger amount of money from their employer in an outlier transaction and suggest that the excess income be put into a savings account or propose investment opportunities.
Invest after your salary increase–Similarly to one-off bonuses, banks can also pinpoint when a customer’s regular salary increases from the average amount they’ve received previously. Here too, banks can offer new savings or investment opportunities.
Keep up with customers’ life events
Watch out for transactions that reveal that a customer has entered a new phase in their lives, like finishing school and starting a career, having a baby or starting retirement. These milestones mean they need a completely new approach to savings and investments. Banks who follow up on these life events with new financial guidance and offers can boost customer engagement, loyalty and trust.
Learn to invest your money – Banks can recognise if their customers have started their careers when their first salary arrives in their accounts and their income profile changes accordingly. Career starters can be recommended various savings and investment products but can also be targeted with new loan offers as they can now probably afford higher instalments.
Avoid tuition troubles – Banks can send out new offers to parents to open a family savings account or buy life insurance when the first transaction related to their child’s education is detected. This transaction may be the first tuition payment at a higher education institution or any other transfer related to enrolment.
Ready for more use cases? Download our free ebook “44 use cases for banks to boost engagement and improve digital offers with data-driven customer insights”.