17 October 2017
Lucile Mathe

Account Aggregation and PFM

Lucile Mathe - eWise

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Finance 2.0

Finance 2.0

A community for discussing the application of Web 2.0 technologies to financial services.

Be alert!

10 April 2017  |  4928 views  |  0

How should you talk to your customers?

Your customers are busy and yours is not the only application or relationship they use. They are bombarded with information, offers and advice. So how should you talk to them? A popular communications channel is push notifications, and they are becoming ever more ubiquitous. But do they provide the communications answer? And what industries use them best?

Research from marketing automation platform Kahuna suggests that financial services notifications have a high user engagement levels than other industries. But for many banks and financial institutions (FI), the question of how to use push notifications can be problematic; with FIs struggling to find the best middle-ground between engaging their end-users too much and too little. In many cases FIs are not using notifications enough, diminishing their visibility in the eyes of their customers. In addition, the scope of the FI’s notifications can be too narrow, just supplying balance information, for example. When competing against a host of other notifications, from gaming to utilities; it’s easy to appear staid, unexciting, of limited added value when communicating a limited message. For many FIs, it requires considerable end-user testing to suit the FI’s particular service-model, which may differ from payments to transfers. One of the most important offer a financial institution can present is real-time intelligence, such as displaying a global view of user’s financial accounts held at multiple institutions enabled through account aggregation. The importance of real-time relevance is of huge importance across a range of sectors.

Engagement with push notifications varies considerably within industries, as noted by Andrew Chen, Head of Rider Growth at Uber. Kahuna identified the varying performance of push notifications based on push engagement rates. The research measured the push success of different industries, ranging from utility and financial services to food and beverage. The result is that financial services and utilities notifications performed strongly with 40% engagement rate, while e-commerce alerts performed worst of all with 11% only.

Interestingly, the research found that 60% of users opt out of push notifications.  The question is why. Is it the technology or the thought process behind the notification that is lacking? In financial services there are ever more ways of interacting with end-users, from mobile alerts to apps, to chatbots now existing on social media platforms. Despite the mode of delivery, end-users no longer want to be addressed on mass, but individually, with communications which account for their individual circumstances and at ever more specific times. 

Data aggregation supported by notifications APIs will, for financial services, give consumers the best return, offering timely, holistic and bespoke advice. Alerting in financial services has an obvious role to play in combating fraud, but can it also maintain a crucial customer service advantage? The value of smarter customer service can be seen across industry, with relevant, targeted and timely alerts. 

Explaining the differences in their success, Mr Chen noted the role of value of the relevant, immediate ‘trigger’. Push notifications, as sometimes used in e-commerce, can be deployed like a broad-brush marketing email, reaching a large audience but not inspiring engagement because these notifications may not be linked to an actual event. There is no ‘trigger’ for them. By contrast, an alert coinciding with an Uber arriving for a pick up is a tangible trigger: alerts must be linked to a particular moment in time requiring an immediate or near immediate response. Notifications should be targeted at a select-user base (like Airbnb notifying hosts of a booking ) or as with the case of e-commerce, alerting the end-user of a product being shipped.

In this regard, financial services can be highly effective in delivering event-linked advice, alerting end-users of a savings thresholds for example; with financial alerts linked to an aggregated wealth picture. For financial alerts to be meaningful they must do more than offer siloed product announcements, relevant to just one financial institution or to a category of customer.  They must relay a rounded and relevant picture of an individual end-user’s financial health. This information, enabled through the best account aggregation technology will be of most value to consumers. This will form the basis of bespoke alerts, which will not be confused as sales message at best, or spam at worst.

Push notifications in financial services must also primarily pursue productivity enhancement, relaying important and timely information and they must not require end-users to take an extra step, such as launching a separate app. If these steps are met, financial health checking notifications can be particularly successful in driving positive end-user engagement among younger audiences demanding an intuitive, personalised 24/7 relationship with their bank. The best notifications in financial services offer balance summaries, salary notifications, bill monitoring, overseas payments alerts to counter fraud, budgeting and saving targets tracking.

Alerts and notifications must enable regular engagement with end-users, helping them make the best of their relationship with the service provider. Yet it is a delicate balance. It takes one irrelevant message to make a customer switch off, for ever. Customers must immediately understand why they are being contacted. And service provider messages must drive positive action.

The Kahuna research implies push notifications are well received in financial services, but there is no room for complacency. Financial service providers must deliver bank-grade precision and relevance with social-media usability. 

TagsMobile & onlineRetail banking

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