HSBC app gives customers a 'nudge' if they're spending too much

HSBC app gives customers a 'nudge' if they're spending too much

HSBC is applying lessons learned from behavioural science with the launch of a new app designed to 'nudge' its customers into making better financial decisions.

The app uses 'nudge theory' to encourage customers to make small, regular financial decisions that will result in a change to long term spending habits.

It was built in six weeks by a newly-formed digital 'scrum team', recruited from non-bank third parties with the aim of mimicking the more nimble approach to app development and release timescales adopted in the consumer electronics industry.

Using software to evaluate individuals’ current account data, HSBC Nudge identifies trends in customers’ spending habits and sends regular, targeted digital ‘nudges’ to make people aware of their expenditure.

Raman Bhatia, head of digital at HSBC UK says: “We know that many of our customers have good intentions for their financial futures, but that willpower alone is not always enough to drive a long term change in behaviour. By incorporating nudge theory into our digital customer communications, we can help customers to achieve their financial goals.”

There are currently 38 types of nudges in the trial, including notifications about the amount of money spent on groceries in a week and updates on how much customers are spending or saving versus others in the same income bracket.

HSBC is evaluating the effectiveness of different nudges in a three-month trial with 500 customers.

Comments: (3)

Tom Sohal
Tom Sohal - Triumph Motorcycles - London 19 January, 2016, 13:12Be the first to give this comment the thumbs up 0 likes

A promising approach to help distinguish the traditional HSBC offering from those of some of the UK Challenger Banks. I've worked with digital scrum teams in a number of financial organisations.  Conceptually sound but they can get bogged down with the demon 4 P's - protocols, policies, procedures and people.  Nudges need form part of a serties of timely re-inventions to convince potential customers that it's worthwhile transfering over to HSBC banking, but will of course benefit some of their existing customers.  In short - HSBC needs a digital strategy led fromn the very top and an IT infrastructure that's totally revamped to support it.

A Finextra member
A Finextra member 19 January, 2016, 16:34Be the first to give this comment the thumbs up 0 likes

This product has some very good possibilities especially for Community Banks, this product could be used for other lead in of electronic products.

Good approach

A Finextra member
A Finextra member 24 January, 2016, 05:47Be the first to give this comment the thumbs up 0 likes

Good product,good thinking. It is good to see that some banks are still in the business of fostering a savings culture which is the essence and traditional pillar of Banking.