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Why Financial-Data-driven Personalisation is the Future of Wealth Management



By Jody Bhagat, President of Americas and Nicole Meyers, Vice President of Strategic Accounts at Personetics


Finance is in the midst of a digital revolution

A decade ago, a personalized approach in wealth management meant a phone call from your investment advisor with new investment opportunities, and a discussion of why it may be a good fit. Now, consumers flick between savings apps that automatically round up your change or robo advisors that manage your investments without your having to brush up on market trends.

Companies like Netflix and Amazon have normalised personalised recommendations on content or products based on what we buy or view. Investors are no different in how they see their finances.

What’s being called ‘autonomous finance’ technology is democratising access to kind of advice that would previously be available to only the most affluent or profitable of clients.

Forrester defines autonomous finance as algorithm-driven services that make financial decisions and take action on a customer’s behalf.” In plain English, this means analysing customers’ transaction data to provide personalised insights and advice in real time, as well as automating tasks to help customers reach their goals faster with less manual input. This means moving the financial-stress burden from the client to financial institution, and so improving their financial wellness.

Jody Bhagat

Financial institutions can now provide incredibly tailored insights to large, medium and small investors, as well as their advisors, at an enormous scale.

This also opens up personalised wealth advice to a much wider audience of customers. For example, helping mass market customers manage debt and build savings, giving mass-affluent customers help with saving for a goal or maximising retirement contributions and, for affluent customers, sharing automated insights with wealth advisors and minimising cash in low-interest accounts.

Sure, it’s taking time for the industry to embrace new technology, but there’s no denying the way the wind is blowing.


What does this really mean for your business?

The journey to achieving the full potential of autonomous finance involves four stages:

  1. Data enrichment
  2. Personalised insights and advice.
  3. Unified advice across channels.
  4. Fully autonomous finance.


Data enrichment

First, you need to aggregate, clean and enrich your transaction data to allow customers to understand what is happening with their money. On a basic level, this means categorising their inflow or out flow transactions to let them know what they’re spending on, or what happened with their investment portfolio.

This gets really interesting when you’re able to build a complete, holistic financial activity map of the customer. Seeing whether someone is a gig worker with irregular income, or has a mortgage, or whether a regular payment always comes out when their balance is low.


Personalising insights and advice

This means not just giving information about a person’s finances, but also advice on what financial action they should consider taking.

This involves taking the cleansed data and running a series of AI or ML models to deeply understand patterns and predict future trends that are important for the customer and their finances. For example, this could be that their portfolio has moved out of their preferred risk tolerance band.


Unifying this advice across channels

This growth in data-driven customer insights won’t diminish the trusted role that financial advisors and relationship managers play, but in fact supercharge it.

These data-driven insights will also provide helpful information for relationship managers so they can provide more tailored and informed advice to customers. For example, if they know that a customer has excess liquidity in their checking account after all expenses have been paid, the relationship manager can intelligently recommend where those funds could be invested.


Autonomous finance nirvana 

Across the pond, U.S. Bank is already using an automated solution to help customers invest, by identifying how much spare cash they have at the end of the month and directing them to an investment account.

More recently they launched a service called ‘Pay Yourself First’ which lets the customer set a target amount to transfer, but then performs analysis when their pay check comes in to inform them if their circumstances have changed and if they should reconsider this month’s transfer.

While autonomous finance in the wealth management industry is still in its infancy, we’re already seeing 25 to 40% of end customers engaging with data-driven insights on a monthly basis and our data suggests financial institutions are subsequently seeing 5 to 7% growth in new accounts.

Implemented successfully, data-driven personalisation creates a virtuous customer flywheel where increased customer engagement and satisfaction leads to deeper relationships and a stronger customer franchise. The opportunity for the wealth management industry is huge – the challenge now is putting this into practice.



Bank-fintech partnerships can shape the future of cross-border payments




Steve Naudé, Head of Wise Platform


People and businesses are more interconnected than ever. In today’s global economy, international payments have taken on new significance in enabling cross-border travel, trade and investment. Despite this, moving and managing money internationally continues to be expensive and often unpredictable due to the inefficiencies of an opaque and outdated traditional banking system.

As it stands, international payments are neither sustainable nor economical for individual customers or SMBs. High fees and a lack of transparency especially prevents micro, small and medium businesses (SMBs), which already operate on razor thin margins, from tapping into their full growth potential and accessing new markets. A 2021 Wise report found that 56% of SMBs are put off from going international due to the frustrations with existing international banking processes.

It is no wonder that there has been a boom of fintechs and specialised digital providers that offer cheaper and faster payment experiences, and are increasingly becoming the platform of choice.

Yet, banks still capture a lion’s share of cross-border payments. Platform switching can be a chore for many customers, who are familiar with and have deep trust in their bank providers, and often lack resources or knowledge when it comes to trialling new ways of managing money. Despite the plethora of options available to customers today in the form of fintech and specialist providers’ apps, it can be time-consuming and emotionally difficult to redirect money to a new provider.

It’s also not always obvious to customers that they need another provider for international payments, because hidden fees make it difficult to know that you’re getting a bad deal. So, for all of these reasons, the most convenient place for them to manage money internationally is with their existing bank provider.

The industry should be looking not to competition, but to partnerships, to solve the problem of international payments. The benefits of partnerships are compelling. According to Cornerstone Advisors, nine in 10 financial institutions consider fintech partnerships to be important to their business, up from 49% in 2019, and nearly two-thirds of banks and credit unions have entered into at least one fintech partnership over the past three years.

There are significant opportunities to be unlocked from combining the agility and technology of fintechs with the reach and infrastructure of established banks. These partnerships can serve as a catalyst for global growth – with each new integration, more people and businesses get access to faster, better and transparent international payments.

Such integrations are often achieved using cross-border payment APIs (Application Programming Interfaces) which are embedded into a bank’s existing infrastructure. They help businesses, banks, platforms and financial institutions scale their capabilities quicker, streamline their payment processes and ultimately grow revenues  – removing many of the frustrations and costs associated with building out new functionality in-house.

However, as transformative as they are, it’s not always easy for banks to work with API solutions. Historically, banks have been asked to integrate new and advanced technologies into their systems, but are given minimal allowances for what’s different about their core architecture. The reverse should be in fact true; fintechs should focus on offering adaptable solutions that can be layered with the bank’s existing capabilities.

For example, banks rely on compatibility with existing financial architecture, including messaging networks such as Swift. Wise Platform recently unveiled a new Correspondent Services solution that enables banks to route Swift messages directly to Wise. This will enable their customers to benefit from the convenience of Wise and the breadth of Swift without needing to implement any major changes to their systems.

Another key element to the success of bank-fintech partnerships is that both parties have a mutual understanding of goals. Both parties must see eye-to-eye on risk management and commit to a collaborative approach.

With the increasingly fast-paced rate of financial innovation, there has been – rightfully – increased regulatory attention on compliance framework in fintech-banking partnerships, which can make partnerships appear riskier than they are and overshadow benefits. However, this worry can be alleviated if banks choose fintech partners who have demonstrated strong compliance expertise, and have experience managing regulations across different markets.

As the global economy becomes increasingly interconnected, it is clear that fintech companies should no longer be seen as simply disruptors or competitors when it comes to international payments. Rather, they are integral partners who will play a major role in transforming international payments for good. Strategic partnerships between traditional banks and fintech players will redefine cross-border travel, trade, and economy, and provide the foundation upon which people and businesses can take part in a global marketplace.

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Improving CX in digital-first banking




By Nina Mack, CX Director at CTI Digital


The financial industry has undergone a seismic transformation over the past few years, with digital-first banks like Monzo and Starling leading the charge. These banks aren’t just changing the way we spend money; they’re completely reshaping customer experience (CX) within the sector.

But the fact that digital-first banks don’t have high street branches is both a blessing and a curse. The ability to complete their daily banking tasks from home is great for customers, but knowing they won’t be able to speak to someone in person when they have a problem can also be off-putting. That issue of service and confidence poses a significant barrier for digital-first banks looking to expand their customer base and can even cost them customers they already have.

Competition in the market is ramping up, from traditional banks expanding their digital offerings to new brands entering the space. The challenge for digital-first banks is to make sure their CX is unbeatable right from the start. They have to be able to handle all of their customers’ needs through that digital medium; if they fail, there is no plan B.

How do digital-first banks get CX right?

The modern customer has high expectations of their online experiences. They expect seamless, convenient, and personalised interactions as a minimum. For banking platforms which are differentiating on user experience, ease and efficiency, expectations will be especially great.

The usability of the app or online platform is critical, but an effective approach towards CX transcends individual features. You can build the most beautiful, functional, accessible app in the world, but if your customer still has to print out and send off a form to change the name on their account, their experience is going to be remembered as irritating and inconvenient. It’s about transforming the entire banking experience into a frictionless journey.

Leaders in the field, such as Monzo, Starling and Atom, are making great strides towards this by, for example, enabling customers to complete ID checks within their mobile apps. But there are also challenger banks, like Aldermore, which are delivering some impressive digital innovations. The banks which are able to remove the irritation customers face elsewhere are the ones which are growing the most.

Digital-first banks also need to make sure they are constantly communicating trust and reassurance through their CX, as fears around security are often what stops people switching away from traditional banks. Make it quick and easy for customers to speak to your support team when something goes wrong, for example. Make sure the support team is able to understand and resolve their issue immediately.

Consider the holistic customer

But we can go further. Money isn’t just currency; it fuels people’s aspirations and ambitions. Digital-first banks need to take a truly customer-centric approach, looking at how money fits into every aspect of their customers’ lives and how they can support them throughout.

The likes of Monzo have started to think this way, with features which allow customers to categorise their spending and decide how much they want to budget for each category, or to save money in easily accessed saving pots.

There’s more that can be done. The next frontier for digital banking will be integrating all financial activities into a unified digital experience. Imagine a dashboard that enables visibility across all of your bank accounts, consolidating transactions, account management, and even alerts for car lease expirations or subscription renewals.

Digital banks can also create an experience which helps to combat financial illiteracy. These platforms have the potential to educate users, from children to young adults, about managing money, budgeting, and interest. Such initiatives can transform banks from transaction facilitators into essential life assistants, building a deeper bond with customers.

Essentially, the key to enhancing CX in digital-first banks lies in viewing the entire customer journey holistically. They have to understand every financial touchpoint, interaction and customer need and feed that into the roadmap of their app or platform.

With physical branches on the decline, digital banking is poised for exponential growth. As the industry expands, CX will be the true differentiator between the winners and the also-rans.

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