Banks around the world are beginning to understand that customers crave a more personal banking experience, with a surprising twist: they want banks to offer financial guidance and solutions for their family’s life stages and needs. We have had endless conversations with customers and banking executives around the growing demand to dial in on customers' needs at every stage of family life - regardless of what shape or makeup that family takes. Many customers are looking at their financial decisions in the context of their family (being a spouse, a parent or a child) and are expecting banks to deliver them a curated banking experience, financial literacy resources and financial planning assistance that support their lifestyle.
The need for a family-oriented banking experience is clear. Many of us have gone through the process of setting up accounts for younger children, helping adult dependents, such as family members with disabilities, or helping older parents with their banking needs. Due to limited available solutions, most people revert to password sharing, opening a child’s account in a parent’s name, or simply excluding children from participating in the financial system. All of these ‘workarounds’ have limitations or risks and are driving customers to seek solutions elsewhere.
Enter the “family-first banking” mindset. With family-first banking, banks can use technology to break down data silos and create pin-point insights into each customer’s dynamic household makeup, helping each family achieve their unique financial goals and incorporate more family members, based on their unique preferences.
Curated experiences are key
Curated experiences include both highly personalized offerings, along with a strong underlying layer of segmentation for families. Similar to how a software program might have different levels of user-based roles, banks can begin to embrace a family-first banking journey by allowing customers to personalize their family permissions.
This strategy is especially helpful as financial roles span multiple generations in a household. One household may have parents who want to get their youngest child a savings account and help their older one open a checking account after they get their first job. Add to this elderly parents who needs their children to have access and visibility to help them manage their finances. Suddenly you have three generations of people attempting to access family accounts for very different needs.
Households have a wide array of needs, often spanning multiple generations, and each of those generations expects their bank to proactively deliver those recommendations and capabilities to their fingertips.
Closing the financial literacy gap
While a family-first banking model may not fully close the financial literacy gap, it can nevertheless go a long way toward improving financial knowledge. 63% of bank customers reported they would stay with their bank and 78% reported they would reuse their bank if they felt supported by their bank during challenging economic times, according to a survey by J.D. Power. And, of course, the more personable and relatable the experience is, the better.
People across the world have varying levels of financial literacy, and self-guided research is often more confusing, not to mention impersonal. Tailoring financial education content to customers based on their age or stage in life, and engaging with their family members as a support system, can help them build confidence and become more literate and capable in managing their finances.
Financial advice made personal
With the help of data analytics and artificial intelligence, banks can address this market need by developing these kinds of differentiated financial experiences and leveraging a mix of software and services. According to Amdocs’ research, 77% of consumers are willing to share more personal information with their bank in exchange for improved offerings, including financial consulting. Banks can explore tools and features such as age-specific educational content, unique user dashboards, parental alerts, and triggers for major milestone events relevant to each family member to offer more curated recommendations.
For example, many parents are interested in putting away tax-free money for their child’s 529 college fund. Because their bank knows information such as the child’s birthdate and dates of past contributions, parents can receive timely recommendations on when to invest for maximum growth.
Taking the First Step
There is more competition than ever for banks to attract and retain customers - they are not just competing with other banks but also with a new class of personal banking fintechs. We often see banks struggle with imagining the hurdles of implementing a system like this, but by focusing on solutions and finding the right tools and partner, family-first banking is possible.
Zur Yahalom is SVP and Head of Financial Services at Amdocs, a leading software and services provider unlocking customers’ innovative potential across the communications, media and financial services industries.
Meet Amdocs at Money 20/20 USA, October 22-25, Booth 10001.
