The spread of COVID-19 is putting a bigger strain on the American financial consumer base which is already stretched thin. Before this pandemic, people were struggling to leverage their knowledge and resources to support their financial goals. In a survey conducted by J.D. Power, about 75% of people reported feeling stressed about their finances, and about half reported they are having a hard time paying bills. 61% reported low cash liquidity, saying they did not have enough cash on hand to deal with a $500 emergency. With many people losing hourly pay or their jobs altogether, investments becoming uncertain and the looming threat of severe illness, the widespread inability to respond to a relatively small cash emergency paints a complex picture for overall American financial wellbeing in the weeks and months to come.
However, there are many positive ways financial institutions can support their customers and develop a strong response to both today’s immediate needs and tomorrow’s longer-term financial strategy. In this blog, supported by data from J.D. Power, I will explore three ways financial institutions of all sizes can create better mobile and digital banking experiences that help reduce stress and promote financial wellbeing during the COVID-19 crisis.
Financial institutions can help customers create a path forward for financial wellbeing
This is an unprecedented situation for most people, including financial institutions, who may be struggling to even know where to start. Now more than ever, customers need communication, accessibility, and experiences that meet them where they are. Financial institutions of all sizes can be a trusted resource and guide during these turbulent times by focusing on providing:
- Helpful, actionable communication
- Increased access to useful, engaging financial education and consulting
- Online and digital tools that support the desired customer experience
#1. Provide concise and actionable information to consumers
Two weeks into the COVID-19 crisis, only 37% of customers surveyed said they had received a helpful communication from their banks. Another 17% said they had received some form of communication, but they did not find it helpful. These numbers are too high under normal circumstances—in our current times of crisis and confusion, these numbers are even more concerning.
Make every communication touchpoint—whether a letter, an email, a phone call, etc.—count by ensuring the message is clear, concise, and centered on vital information that customers need to know to move forward with financial activities.
Now more than ever, customers need help processing information and planning an achievable, valuable course of action with their finances. This blog post from McKinsey includes helpful checklists that cover the topics consumers need to know about right now, including where to find digital resources and how to access bank products and processes online. Make every communication touchpoint—whether a letter, an email, a phone call, etc.—count by ensuring the message is clear, concise, and centered on vital information that customers need to know to move forward with financial activities. Keep the message focused on how your institution is specifically addressing the crisis for customers and what key steps customers need to take rather than generic, “we are taking all necessary precautions” emails. People want to know what these precautions and processes are, so drill down and get specific.
#2. Evaluate how you can provide better access to engaging tools
Even before the crisis, there seemed to be a large gap between the financial guidance customers desired and the amount of guidance they received. 83% want financial advice and guidance from their financial institutions, but only 16% say they have actually gotten useful advice and guidance. Perhaps because of this, 52% of people said their banks did a poor job of helping them make better financial decisions.
Currently, only 19% of customers surveyed had used a financial tool provided by their bank, and only 7% reported using a financial education program through their bank. Since many banks have focused on implementing financial wellness education, programs and tools in recent years, there appears to be disparity in what banks are creating and implementing and what customers actually need from their banks. This could be partially that many of these tools and programs are self-directed and rely on customers seeking them out on their own. Additionally, many customers do not know how to properly use some existing models and calculators without more basic, hands-on guidance.
Currently, only 19% of customers surveyed had used a financial tool provided by their bank, and only 7% reported using a financial education program through their bank.
This points to a larger accessibility issue. Financial institutions cannot assume their customers know how to navigate their websites or find educational materials on their own. If 43% of consumers rated their overall financial knowledge as “weak,” they may need more hands-on, proactive guidance to construct useful financial education pathways. Artificial intelligence (AI) tools, personalized content, email courses, teleconsulting and other methods can be used in various ways by institutions of all sizes to help customers find and access useful education, rather than waiting on them to stumble on it themselves.
#3. Use customer data to invest more intentionally in online and digital experiences
With social distancing and shelter-in-place orders going into effect across the country, customers are having to access banking differently, including increased usage of digital tools. Over a third of people surveyed said they planned to rely more heavily on their financial institution’s online and mobile banking tools to help navigate outbreak concerns. With more people relying on online and digital banking tools, especially in target groups that have traditionally had low adoption rates, there has never been a better time to track customer experiences with mobile and digital tools, solicit customer feedback about these experiences and focus investing in the things that actually matter to customers.
Over a third of people surveyed said they planned to rely more heavily on their financial institution’s online and mobile banking tools to help navigate outbreak concerns.
Only about half of customers surveyed reported that their financial institutions was “very effective” at meeting their needs with online tools. This area of focus is especially important for midsize institutions: about half of big institutions have become digital-centric, compared to 31% of midsize. Online and digital adoptions may go up during this crisis period, but that doesn’t mean customers won’t go back to their preferred way of accessing service once social restrictions have been lifted if online and digital experiences don’t prove to meet their needs better than their traditional way of accessing services.
Use this period of increased digital usage to really dig into what is working and not working for your customers and take meaningful steps towards creating a better mobile banking experience. Consider mobile app surveys, quick feedback sessions at the end of calls, star ratings after accessing specific tools, and other methods to gather data. Additionally, look at what digital tools are not being accessed and readily used during this crisis—is your mobile banking app on fire with new users, but your educational modules are still barely touched?
The only way forward is through
This survey data suggests that American financial wellness already had vast room for improvement before COVID-19 concerns became prominent, and many of the strategies institutions were focusing on before the crisis remain vitally important. At Temenos, we are working constantly to assist our clients with creating better, more impactful digital banking experiences for their customers, and we recognize that now is an especially important time for education and strategizing. If there is anything we can do to be of assistance for those navigating this difficult and complicated time, we are here to help.
This blog used data from the Coronavirus Financial Health Pulse Survey Webinar: Presented by J.D.Power, which can be accessed on-demand through BrightTALK here.