NEW YORK & LONDON--(BUSINESS WIRE)--As inflation and living costs hit record levels across the globe, people are calling on their banks to better support them through the cost-of-living crisis. That’s according to a new study of 5,000 banking customers worldwide by Personetics, conducted by Censuswide, which warns customers are disappointed by their banks’ reaction to date and are prepared to switch to competitors who can offer a higher level of personalized service.
Earlier this month, the World Bank warned of “stagflation” with the global economy facing weak growth and high inflation reminiscent of the 1970s, as the impact of a two-year pandemic is compounded by Russia’s invasion of Ukraine. This ominous economic outlook is putting additional financial stress on banking customers, who are starting to demand a higher level of support during tough economic times.
Bank customers crying out for help
The cost-of-living crisis is already affecting the everyday life of 93% banking customers, Personetics research reveals, with over half (61%) reducing their spending on non-essential items. A huge number are also cutting essential spending, with 43% reducing their home-energy use to cut costs.
Customers say their bank is not doing enough to help them in this unprecedented crisis. Nearly two-thirds (63%) of banking customers say they have heard nothing from their bank in the past three months to help them manage their money. Those that have had some communication are unhappy about the generic advice they’ve received (66%) – such as general economic news and information about inflation.
Less than 10% of banking customers had heard from their bank and received messages personalized to their individual situation, such as advice based on their current expenses or alerting them to potential future difficulties.
This perceived lack of support is damaging banks’ reputations among customers by neglecting their brand promise to them. Just over a fifth (21%) say their bank doesn’t understand their financial needs at this time, and a further fifth feel their bank doesn’t care about them.
More proactive, personalized solutions demanded
The study also reveals what money management support customers want from their bank. The most common requests are suggestions of ways they could save more money each month (30%) and for banks to eliminate overdraft fees (29%). They are also demanding more advice personalized to their individual situation, such as recommendations for cheaper financial products like credit cards or loans (26%) and reminders of subscriptions they might have forgotten to cancel (26%).
What’s more, banking customers want their bank to be proactive in supporting them, such as offering personalized recommendations and relevant product-based advice. Around two thirds want their bank to automate their financial decisions and money management to save them time – such as automatically transferring spare cash into a savings account - (61%); and to identify advance signs of financial stress and respond with solutions and advice (66%).
The risk – and opportunity – for banks
If banks get this proactive money management support right, they stand to retain existing customers and win new ones. Well over half (58%) of banking customers would consider switching to a bank that offers better money management features. In particular they are looking for: help with growing their money (automated savings, debt payoffs and investments - 27%); and helping them spend and budget smarter and save money automatically (25%).
Personetics, which commissioned the study with Censuswide, reaches over 120 million customers of 85 financial institutions in 30 markets worldwide, including Santander UK, Santander Spain, US Bank, Ally and Intesa Sanpaolo. Personetics’ financial data-driven engagement platform helps banks better understand their customers’ financial behavior so they can turn this into powerful personalized recommendations that enhance financial wellbeing, and proactively act and advise customers in real-time and at scale.
David Sosna, CEO of Personetics said, “In customers’ hour of need, banks urgently need to step up. People are crying out for their bank to help them through the greatest financial shock of a generation as inflation and household bills hit record levels. Banks are ideally placed to become part of the solution, not just watch from the sidelines. Harnessing customers' financial transaction data would allow banks to offer personalized guidance and advice at scale to help people make better money management decisions. Banks have the opportunity now to use technology to urgently help their customers build financial well-being and resilience. Not only is this the right thing to do, but it will also help increase customer loyalty and customer lifetime value."
For the full findings, the report “Cost of living crisis: why banks need to act now” can be downloaded on the Personetics website.
Notes to editors
Methodology
In May 2022, Personetics commissioned global, insight-driven research company Censuswide to survey 5,140 banking customers. This comprised 2,021 respondents in the UK, 2,093 in the US and 1,026 in Canada. The aim of the research was to understand respondents’ experiences of, and opinions about, their retail banks. Unless stated otherwise, data cited in this report is drawn from the survey.
About Personetics
Personetics is the global leader in financial data-driven personalization, customer engagement, and advanced money management capabilities for financial services. We are creating the future of “Self-Driving Finance,” where banks can proactively act on their customers’ behalf to help improve their financial wellness and achieve financial goals.
Our industry-leading data analytics solutions harness customer financial transaction data to provide day-to-day actionable insights, personalized recommendations, product-based financial advice, and automated financial wellness programs. We offer solutions for mass market consumer banking, SMB banking, wealth management, and credit card issuers.
We drive business impact for financial institutions by improving relevant product targeting for accurate, efficient cross-selling and upselling. We help financial institutions deepen their customer relationships, increase core deposits and customer retention, expand share of wallet, and boost Customer Lifetime Value.
Personetics currently serves over 85 financial institutions spanning 30 global markets, reaching 120 million customers. We are backed by leading venture capital and private equity investors, with offices in New York, London, Tel Aviv, Singapore, Rio de Janeiro, Tokyo, Paris, Madrid, and Sydney. Learn more at personetics.com.
