Unexpected consequences – how digital services can change consumer behavior

Image credit: iStockphoto/Petar Chernaev

Banks today are constantly looking for ways to improve their digital services in order to stand out from the pack and attract the attention of customers. With online and mobile channels now the first point of contact for many people when they carry out banking activities, delivering a feature-rich, easy-to-use offering is essential.


However, with the right tools, banks can do more than just make it easier for their customers to manage their accounts – they may even help change people’s spending behavior.


That’s what Canada’s second-largest bank Toronto-Dominion (TD) discovered when it rolled out its TD MySpend app earlier this year. The tool was intended to offer more information to consumers who were using their phones to check their balances, but one consequence of this was that users weren’t just getting information about their spending – they were actually changing their habits.


The bank found consumers using the service had been able to reduce their spending by around eight percent. This wasn’t one of the initial goals of the app, but it’s a great illustration of how user-friendly digital tools can help consumers gain a better picture of their banking activities and encourage them to make changes.


Rizwan Khalfan, chief digital officer at TD Bank, told Reuters: “The real-time nature encourages customers to change their behavior toward their financial goals. We were not expecting this.”


This highlights how sometimes, what an app is designed to do and what the eventual experience for the end-user turns out to be are not always the same thing, and it’s up to banks to recognize this and react accordingly. TD Bank, for instance, is adjusting and expanding its marketing campaign for its app based on the experience of its initial adopters.


This is just one example of how banks can use the data they collect about their customers’ spending habits and present it in a way that makes sense, in order to help consumers change their behavior for the better.


Josh Reich, chief executive and co-founder of BBVA’s Simple, stated that being able to show people their overall spending trend, instead of just monitoring their peaks and troughs, can help reduce impulse purchases.


“If you give people the tools to feel in control, they will take control,” he said.

Written by Jack Dougal

Jack Dougal

Jack Dougal is Banking.com's resident news reporter. He writes regular blogs covering the latest stories and key developments in the global financial services industry.

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