3 Ways to Use Data to Build an Impactful Financial Wellness Strategy

Many consumers, even those not economically impacted by COVID, need help keeping track of today's more complex financial arrangements. To meet this growing need, banks and credit unions must incorporate guided, proactive and timely insights into personalized interactions in a way that fits into their customers’ lifestyle.

Financial wellness is becoming more and more of a focus for both financial institutions and consumers. But it’s not always easy to provide a comprehensive financial wellness program or support for consumers.

Everyone has different needs and is at a different level when it comes to the complexity, understanding and management of their financial lives. While some are just starting out on their financial journey, others are in the middle of hitting big milestones.

Although financial literacy is a part of financial wellness, it can’t be the only focus. The truth is, financial literacy alone falls short. People don’t want to learn about investment options when sometimes all they need to do is find out how to pay off debt faster.

This is where technology comes in. In order to create a successful financial wellness strategy, financial institutions need to incorporate guided, proactive and timely insights into relevant and personalized experiences and interactions.

In essence, financial institutions need to use technology to fuel financial wellness in actionable ways that are relevant in people’s lives in that moment in time. Here are three ways you can incorporate data-driven experiences into your financial wellness strategy.

1. Guided Financial Advice

Finances are a central part of people’s lives, so it makes sense that it’s often at the top of the list of what they most worry about. Financial stress, however, can often lead to lack of productivity at work, health issues, family arguments, and much worse. Most of us can use more financial guidance. When it comes down to it, finances are complex and often hard to understand. Adding to that, with how busy day-to-day life is, it can be hard for people to sit down and set aside time to manage budgets and track where their money is going every month.

So, how can your bank or credit union help people in your target audiences start making sense of their finances? One place to start is with guided, proactive advice that gives consumers clarity at all times into where they are in their financial journey. Financial tools that offer this type of guided advice can help people form healthier financial habits.

Key Insight:

63% of survey respondents said they would like their banking provider to send them proactive, personalized messages and alerts that help them manage finances.

Notifications as simple as overdraft fees or surfacing subscriptions that aren’t being used can quickly help your consumers take the right action at the right time to avoid getting into financial trouble or stop spending money unknowingly.  This type of experience will help transform how your target audiences view  their relationship with your institution from a place of transactional interactions to one of meaningful advice.

In essence, AI-driven financial wellness tools are the GPS of finances — they can help you tell people what direction they need to go to ensure they’re always making the right decisions throughout their entire financial journey.

2. Automated and Actionable Insights

There are many elements to managing finances. Even for someone with a relatively simple financial life, there are still recurring bills, credit cards, unexpected expenses, various loans and investments and more. It’s easy for someone to get lost in everything they’re trying to track and overlook or miss something that could be significant.

With predictive analytics, banks and credit unions can highlight potential red flags for their customers, helping them avoid getting into financial trouble and spot anomalies that could lead to fraud.

Automated insights, founded on enhanced data, will give you a deeper understanding of your target audience, which will enable you to delight them with the experiences they want to have. You’ll be able to automate parts of their financial lives that they don’t have time to manage.

For example, something as simple as proactively telling them what debt they need to pay off first to save the most money, or making recommendations on how much to save based on their typical expenses, or quickly surfacing a purchase that was out of the ordinary, will dramatically simplify their lives. This is exactly the kind of experience they want and need.

In a survey we found that 68% of consumers would like their banking experience to be similar to the experience they have with Netflix, Amazon, and other tech companies that understand their needs and offer recommendations based on their information.

3. Simple Feed Interactions

The way people engage with the world now is in micro-segments. For example, when they engage with social media platforms they might interact with a post here and there, or send a quick message to a friend, but the interactions are usually brief. Similarly, people need a financial feed — a central location where they can view, move and interact with their money in micro segments. By providing them with the information they need to act in the moment, they can more easily prioritize what to focus on and tackle one thing at a time.

With enhanced and augmented data, your institution can create a personalized feed that includes transactional information, timely notifications and educational tips specific to individual needs. Essentially, this is a way of breaking down big and complex financial matters into smaller, actionable steps. With technology, you can help consumers make smarter decisions when it comes to managing their financial lives in real time — without the heavy lifting.

Financial Wellness Starts With Data-Driven Money Experiences

As people’s lives evolve, so does their financial situation. That’s why financial wellness means different things to different people at different points in their lives.  Everyone needs guidance, advice, and help all along the way — from their first credit card to their first car to their first house and beyond.

But it’s not always as simple as it sounds. To truly offer a data-driven experience similar to Amazon and Netflix, you need to be able to take unstructured data and enhance it so it becomes easily accessible and actionable. Once you’re able to do that, the data turns from historical to predictive — helping power AI and machine learning capabilities that enables you to provide the experiences that meet peoples’ expectations no matter where their financial journey takes them.

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