FINANCE FOR GOOD: FINANCIAL EMPOWERMENT
What we really, really want from banks Finastra took an unusual approach to gathering content for its research into what would help consumers manage their money and their relationship with banks. It’s a timely wake-up call, says Mary Connor, a Director in Finastra’s Retail Banking and Product Management Group The first of many things about Finastra’s latest report that causes you to pull up short is the cover. It’s a montage of faces – of real human beings – not some abstract, concept of digital finance that has often been seen in similar types of industry reports. And that’s because this one aims to shed light on the genuine views that ordinary individuals have about the relationship with their bank. It doesn’t pull any punches. In fact, you could summarise its findings with a phrase we’ll borrow from our school days (which, honestly, still sends many of us cold): ‘must do better’. Finastra bills the report, called Redefining Finance For Good: The Journey To Financial Empowerment, as a ‘first of-its-kind, ethnographic global study’, which was carried out between the second half of 2020 and early 2021, a period that caused many of us to reassess lots of things we’d taken for granted: our choice of financial services provider being just one of them. It set out to ‘understand the consumer mindset about the current state of
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digital banking and uncover the barriers and perception issues that could limit consumers’ adoption of innovative products and services’ – specifically, those services aimed at helping them manage their finances better, and allow banks to build more meaningful relationships with them. To cut to the chase, the report’s main conclusion was that, according to those surveyed, financial services – the legacy providers, at least – had largely lost their way and must act now. They need to ‘redefine their sense of purpose, adopt more socially responsible and sustainable business models and put customers’ financial wellbeing at the core of their strategy’. That’s not an altruistic aspiration. If they don’t nail and communicate their values, banks will fail to drive customer engagement and, ultimately, growth. The starting point for the report was the post-COVID impact on people’s financial wellbeing, amidst accelerating use of digital services. Yet the fact that increasing digital access isn’t widening uptake of new, non-traditional services from their banks, is telling. Finastra’s hypothesis is that people experience a range of functional to emotional barriers, some due to inadequate digital interfaces and communication and others along the lines of ‘my bank doesn’t know me’. Perhaps conscious that, as a supplier of core banking technology to the industry, it needed to demonstrate impartiality, Finastra engaged ethnographer and author Paula Zuccotti for the project, allowing her to take a more creative and human approach. She interviewed 72 people, aged 20 to 60, across Africa,
Asia Pacific, the USA and Latin America. These individuals represented different demographics and included users of traditional and challenger banks, as well as the unbanked. Each was asked to talk about their financial goals and what financial empowerment means to them, then photograph seven items that told their financial story. The unusual methodology revealed some ‘unique and beautiful insights’. In total, 127 banks were mentioned and 504 objects highlighted. The report concluded that three things were most important to participants: knowledge/education about finance; control/having the tools to do what they needed to; and freedom, made possible through provision of the right services. It’s what the survey dubs ‘the journey to financial empowerment’; people wanted banking to be done ‘my way, within my limits and according to my timings’. Finastra also discovered that banking is an emotional subject, some people saying it is ‘not for them’ and others not feeling competent to talk about it because they said banks use a language they don’t understand, i.e. small print and complicated phrases. As a consequence, some tend to ignore their bank and its messages.
