A lifetime of money management – how banks need to help

How should banks be adapting their offerings to support customers throughout a lifetime of money management decisions?

A relationship between a customer and a bank can, if nurtured effectively, be one that lasts a lifetime. And through all these years, it’s vital for financial institutions to recognize the evolving needs of their customers and respond accordingly, in order to ensure that their users are always getting the best possible service.

At the heart of this needs to be how banks help their customers manage their finances through all the key milestones they’ll encounter over the years. But this may not always be something organizations achieve unless they take the time to understand their users, develop relationships with them and proactively offer tailored services that reflect their needs.

How money management tools must adapt

I wrote in my last blog about how personal financial management (PFM) tools need to be improved in order to effectively meet the expectations of today’s customers. In particular, they need to take many of the manual processes out of money management in order to help consumers focus more clearly on their financial goals, rather than housekeeping to make sure the tools are accurate.

As people get older, their needs will often evolve, and they’re likely to lead much more complex financial lives. It’s one thing, for example, to offer tools to an 18-year-old who’s just starting college and looking to manage their budget for the first time. To serve these customers, key information that tools need to show include how much is being spent compared to their balance and any income they may be earning, and highlight warnings when spending threatens to take them into the red.

But as people age, their needs change and it takes more knowledge and expertise to be able to manage their money effectively. However, researching what they need to do differently to stay on top of their finances is often something that people are not willing or able to devote the time to.

For example, people will have questions about what they need to do to be able to save for their first home. Then, it might be asking what they need to do to pay off college or car loans, save for their own kids’ college funds, and start putting money away for retirement.

Giving people the help they need

As their financial needs grow more complex, it takes time to understand these often-competing demands – and this may well be time they do not have. However, if banks have access to high-quality data about their customers’ financial lives, this gives them a great opportunity to reach out and help coach their customers on how to best plan for and reach those goals.

Banks will have built up a huge amount of information on customers and their varying personas as they got through their lives, so it’s vital this knowledge is applied to their money management solutions. Things like offering college-age customers proactive advice on budgeting and making balance alerts a priority for these users are a great start towards building the relationship while helping to start their financial lives on the right track.

As customers mature in their financial lives, explanations of the differences between various mortgage or retirement savings products will need to be offered within these services, ensuring that no matter what stage someone is at on life’s journey, they are getting the help and advice that is most relevant to them.

Written by Aaron Oplinger

Aaron Oplinger

Aaron Oplinger is a Solution Manager with Digital Insight/NCR. After spending more than a decade working for financial institutions enhancing user experiences, integrating functional aspects between delivery channels and integrating emerging technologies he joined Digital Insight’s Solutions team and is responsible for leading innovative, engaging and delightful online banking experiences.

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