A Need for Consumer Education and Engagement
The average consumer has 5+ financial accounts spread across a variety of banks, credit unions, loan providers, credit cards, etc. As a result, they may struggle to effectively track and manage their finances. Consumers are looking for a way to bring all of this messy money management together.
In fact, MX’s latest survey of more than 1,000 U.S. adults shows 57% of consumers said they would pull together all of their finances into a single mobile app to make them easier to track and manage if they had the option.
But, here’s the kicker — they probably do have that option with most of the financial providers they use. But, only a small portion know it. Just 13% said they have already pulled together their finances into a single mobile application.
So why does connectivity matter? In addition to making things more difficult for consumers, these fragmented financial lives make it harder for organizations to get a clear picture of their customers so they can deliver the right products and services to meet their needs, target consumers with the right messages, and accurately predict and prevent churn.
Powering Data-Driven Growth
By enabling consumers to easily connect all of their financial accounts into a single place — and educating them on how to do this, financial institutions can drive higher levels of engagement, deliver more personalized experiences, and gain greater intelligence about their customers. And, this translates to higher deposits, loans, and interchange revenue, as well as longer term retention.
Higher Engagement for Higher Deposits
MX data shows consumers who connect at least one or more external financial accounts are 48% more likely to be digitally active a year later than those who don’t. And, consumers who engage regularly and often with mobile and digital banking services are more loyal, have less turnover, and maintain higher deposit balances than less engaged consumers.
Better Personalization for Better Retention
Nearly half of consumers (47%) expect greater levels of personalization in banking than ever before. A recent Zendesk survey also found 72% of consumers said personalization is “highly important” to them and 77% of banking leaders said it leads to increased customer retention.
Increased Intelligence for Improved Outcomes
At the end of the day, it’s all about the data. Connectivity makes it possible for organizations to gain access to larger sets of consumer-permissioned financial data, which fuels intelligence and innovation across nearly all areas of the business. According to Forrester Research, financial institutions using data to tailor their services and communications see up to a 15% improvement in customer retention rates.
Delivering the Best Connectivity Experience
Beyond education, what creates the best connectivity experience for consumers? MX’s latest research shows it may come down to ease, speed, and trust:
Make it easy: 43% of the 1,000+ consumers surveyed say the most important factor is being able to easily connect all of their financial accounts. Other top factors include knowing their financial data is safe and secure (31%) and the ability to control and manage who has access to their financial data (14%).
Make it fast: When asked how much time they would expect it to take to add one of their financial accounts to a consolidated view, the majority (49%) say they expect it to take no more than one minute. Among Gen Z, 53% expect it to take no more than 30 seconds while 15% say less than 10 seconds.
Make it trustworthy: For the small portion who would not bring together all of their finances into a single mobile app, 41% say they don’t trust a single app to keep all of their financial data safe. One-third say they don’t want a single app to have all of their information.
Finally, MX’s research specifically asked about bringing together finances into a single mobile app. With mobile at the top of the list for how consumers want to manage finances and a myriad of financial accounts spread across financial services providers, consumers have little patience for bad mobile experiences.
The majority of consumers said they are not likely (35%) or very unlikely (22%) to have an account with a financial provider that had a poorly rated mobile app or bad mobile experience. Among those who said it was likely that they would have an account (20%), convenience and habit drive their decision:
- 54% said they would if the financial provider has a location convenient to where they live
- 18% said it’s the financial provider they’ve always used
- 14% said it’s too much hassle to switch providers
Bottom line? Consumers have more choice than ever in where to turn for financial services. Financial providers who will win in today’s competitive market are those who offer connected, data-driven experiences.
