In response to the cost-of-living crisis, financial institutions are boosting their data-driven financial management support.
According to recent research by open banking market leader, Tink, over 40% of banking executives believe they have a duty to assist customers with their financial management during this economic challenge. Additionally, 45% feel obligated to ensure that their products and services are inclusive and accessible.
In fact, over half (56%) of the banks surveyed acknowledged the commercial benefits of providing such support, including reducing customer churn (42%), improving retention and loyalty (42%), and lowering acquisition costs (36%).
From a consumer perspective, the demand for tailored financial support is high, with 37% wanting their bank to do more to help them manage their finances. While 49% of the surveyed consumers trust their bank more than any other financial services provider, only 27% feel that their bank is actively helping them navigate the cost-of-living crisis.
Despite the potential benefits of data-driven financial services, not all consumers are aware of these tools. Around 30% of consumers are not sure if their bank offers budget management tools, and 35% are uncertain about transaction categorisation tools.
Tink’s UK & IE Banking Director Tasha Chouhan said, “As UK consumers brace themselves for ongoing financial difficulty, it’s encouraging to see banks recognise both the responsibility and opportunity in offering data-driven financial services to help consumers manage their finances during this challenging economic time.
“To pick up the pace, financial institutions should continue to invest in building these services, alongside raising consumer awareness of the tools already on offer. Partnerships with fintechs specialising in money management tools are one way institutions can bring data-driven products to market at scale, taking the friction out of integrating them into their core offering.”
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