Consumers see their banks as more of a stressful utility, rather than a financial advisor.
According to the Future of Money report released by Cognizant, banks are not proactive with the financial needs of their consumers; 90% of consumers surveyed stated that they primarily deal with their bank for simple transactions only.
“Simple transactions” exclude any discussion around financial health, including insurance coverage or retirement savings, according to the report, which surveyed about 3,000 consumers in the United States and the United Kingdom. The report also concludes that consumers are keenly feeling the lack of financial advice, especially as they often have to reach out to their bankers about those topics themselves.
In fact, only 19% of consumers stated that they felt their bank had a holistic grip on their finances, tending to view banks within the same bracket as an electricity or other utility provider. Barely a quarter (27%) of participants stated that an FI professional at their bank had reached out to check on their insurance needs, the report said.
According to the report, while there are some lingering effects from the 2008 financial crisis in the minds of consumers, the real key is the fact that banking has shifted to a more transactional type of service.
So what’s the solution? Well, banks could start by integrating more complex capabilities into the digital tools they offer, as consumers are asking for more and more digital “slow-money” services.
“Slow-money” here refers to products such as standing orders, savings accounts, pensions, insurances, financial market investments, and physical assets.
From the report:
[Consumers] do not trust that their slow money and the financial providers that hold that money will support them in the future. Their slow money doesn’t make sense to them, and it fails to alleviate their financial stress.
Today, the biggest barrier for FIs seeking to build meaningful customer relationships is demonstrating how digital can support the marriage of people’s fast- and slow-money challenges.
The full report may be found here.