Democratizing Financial Services for a New Consumer Demographic
How to adapt digital banking and investment offerings to help customers achieve their goals
In this PSFK Weekly Debrief, we take a look at how finance industry leaders are adapting digital banking and investment offerings to help customers achieve their goals.
2020 proved to be a year characterized by shifts across industries, products, and perspectives. Many consumers are reevaluating how they handle their money, setting new personal goals, and adjusting their financial decisions in response to the major life changes they have faced this year.
While seeking out new services to achieve these goals, consumers are turning to their digital and IRL communities for open discussions and trusted advice, creating a need for greater transparency within financial services offerings, as well as an updated user experience strategy.
To keep up with these changes, banks and finance-focused companies are offering a host of digital-first services to fit seamlessly into consumers’ tech-centric lifestyles.
Three Trends to Consider
Drawing from a recent paper exploring this democratization of financial services, PSFK Research shares three top ways key players are adapting e-banking and investment offerings to help customers achieve their various goals as well as investing in innovative UX to meet expectations for seamless digital journeys.
Financial Growth Planning — Long-term financial planning—paying off debt, building credit, buying a first home, etc.—can be daunting for many consumers. The process requires knowledge, patience, and work. In an effort to simplify that process, new financial services are offering tracking tools, educational features, and personalized guidance to help customers achieve their individual goals. Credit.ai’s ‘Unicorn Card’, for instance, appeals to young, skeptical consumers by offering transparency, providing risk-mitigation services, and optimizing credit with AI-enabled financial tools. The company's approach to banking was created by a multi-curious team comprised of attorneys, journalists, an astrophysicist, a 3D animator, and twenty engineers.
Goal-based Saving — For many younger consumers, saving up for a specific purchase can be their first foray into the financial world. To build affinity with this aspirational group, new platforms are modernizing the process of setting aside money. With an eye towards digital-first shopping, these streamlined tools are automating contributions, tracking progress, and often pairing the act of saving with personalized incentives or interest-bearing accounts. The app Reel, for instance, makes saving up for a big-budget purchase effortless. Consumers select their target product, link their bank accounts, and sit back as the app automatically sets aside a user-determined amount of money each day until, when the full price has been saved, the app completes the order.
Targeted Accessibility — Traditional banking and credit products have primarily targeted mainstream consumers, whom the industry (particularly in the US) has defined as older, white and with more disposable income. This has alienated many potential customers from the banking industry. Despite its potential, this growing consumer base may not score highly against typical financial criteria, making it difficult for them to begin participating in the broader industry and economy. In an effort to change this, new financial platforms are targeting these emerging groups with expanded services and educational opportunities, promoting inclusion and transparency. For example, banking app Revolut Junior is teaching financial literacy to children and teenagers, empowering them to manage their finances (i.e. allowances) with a suite of fun and informative banking tools.
These are just some of the ways that industry leaders are revitalizing their offerings to appeal to new generation of consumers — see how you can access the full research paper here.