Banks face a trust paradox. While customers trust banks with their money, only 19% of them say they are interested in receiving advice from a bank. And the more digital banks become, the less connected they are with their customers. With banks rapidly boosting their digital touchpoints during the pandemic, now is the time to double down on life-centric connections to grow, accelerate and disrupt in new ways.
We are living in a time of a permanent reset in the human condition, and customers expect much more from their banks, including the ability to deliver on their re-balancing of values. A recent Accenture Song report on the Human Paradox found that the vast majority (88%) of executives believe customers and employees are changing faster than they can change their businesses.
With this paradox, how can banks pivot from customer-centricity to life-centricity and move beyond advice? We see a new way for banks to grow by shifting their focus from individual products to the customer as a whole.
We recently conducted research to understand what mass-affluent banking customers are looking for when it comes to expectations beyond advice and banking products. When banks start thinking beyond what they’ve always known about traditional financial advice, they can scale meaningful customer experiences. Let us explain.
What mass-affluent customers are saying about advice
The mass-affluent customer segment represents a significant growth opportunity for banks.
We are witnessing leading banks democratize advice experiences typically provided to their high-net-worth and ultra-high-net-worth investors through tailored wealth management solutions with digital advice tools to the mass-affluent segment. They are achieving this by scaling and marketing these digital advice tools to the mass-affluent segment. This trend is highlighted in our report produced jointly with the World Economic Forum and BNY Mellon: The Future of Capital Markets: Democratization of Retail Investing. This segment will only continue to grow.
When we discuss ‘moving beyond advice’, we’re encouraging banks to think beyond traditional ways of giving advice. We believe past expectations are not attached to outcomes and are not personalized for customer partnerships. Today, customers expect a bank to be responsible with its advice by providing tools and knowledge to help ensure the best outcome for a customer’s specific needs.
Since customers are more informed and are looking for help in making better life decisions, they are unwilling to compromise on the desire for more meaningful, personalized partnerships with banks. They want help as they adapt and manage the demands of everyday life. Take CIBC’s ‘Ambitions Made Real’ campaign, for example, which shows how the bank can help first-time parents with financial compromises and concerns.
Before we dive in, it’s important to zoom out and consider the 15-year journey that influenced our research results. There are underlying drivers that have impacted the mass-affluent customer of today. These include a growing focus on mental health, trust, introspection, values/identity and intrinsic motivation due to past events and cultural changes. With these drivers considered, our research identified seven key mass-affluent customer themes:
I Do it, My Way
This customer wants positive reinforcement from the bank through recognition of their achievements and acknowledgment of their personal financial management. We believe this customer theme is on the rise as more direct investing tools become increasingly popular.
The ‘I Do it, My Way’ customer says, “If a bank wants to work with me, it must respect everything I’ve achieved. I want a bank to collaborate with me and tell me how I should move forward, like a respectful mentor or a coach. It should help me identify my blind spots while assisting me as I investigate new avenues for my financial growth.”
Singapore’s DBS recognized that a “one-size-fits-all money management plan” is not realistic. Its NAV Planner is a good example of how the industry is responding to this customer theme. An “intuitive digital tool”, it brings together a customer’s financial life in one place to provide personalized insights at different life moments and help the customer celebrate moments of joy.
Confidant and Coach
This customer believes the management of wealth and finance is an extremely personal and emotional journey. They hold trust, relevance and value alignment as the most important factors in a financial relationship.
The ‘Confidant and Coach’ customer says, “I don’t like sharing my financials with anyone, even my friends and family. So, if I’m sharing them with a bank, I need to know I can trust it. I need to know it will give me value and help me grow. This is an emotional experience for me.”
Monzo understands that “making big decisions is hard” and aims to support customers beyond traditional banking expectations by focusing on key opportunities to support. For example, the bank works to sense when a customer is on vacation so it can provide summarized spending and send notifications if monthly payments are higher than in previous months. Additionally, it tracks utility payments to offer suggestions of alternative providers with better rates, and even supports the switching process.
Thriving in Chaos
This customer is seeking help and guidance in understanding and balancing the unknowns. They seek support from a bank. With the constant uncertainty of life, they want mitigations that improve security and stability.
The ‘Thriving in Chaos’ customer says, “I’ve lived through a recession, the era of post-truth, a pandemic, a war and now hyperinflation. I know change and unpredictability are the only constants in life, and I need a bank that helps me prepare for the ups and downs.”
When almost half of Australians revealed they were feeling greatly concerned about the future impact of COVID-19, Commonwealth Bank rolled out an app feature called The Coronavirus Money Plan. This was designed to help with money management during the pandemic and created “actions and tasks suitable for a customer’s circumstances based on their level of impact” during the challenging time
True Meaning of Wealth
This introspective customer is re-evaluating the purpose of life and what truly matters to them. They are expanding the definition of wealth to prioritize happiness and fulfillment with new goals and objectives.
The ‘True Meaning of Wealth’ customer says, “Keeping up with the family next door is not important to me any more. That’s not what life is about. I’m focused on my family and my community. I want a bank that understands my values and helps me prioritize them.”
Bank of America’s Life Plan is a digital experience with a design that meets the needs of this customer. It focuses on providing choice for customers by prioritizing over 27 goals based on what is important to the customer. Furthermore, it helps customers better understand and act on steps toward achieving their goals
This customer expects a bank to explain financial health in great detail and with clear planning. They need a bank to demystify the complexity of banking to ensure clarity. Education and insights are key factors to win this customer’s trust.
The ‘Radically Transparent’ customer says, “Let me see clearly what the decisions of today mean for my future. But don’t just tell me. I want a bank to show me the details of my future financials–show me the changes that are coming.”
In a previous blog post, Jess highlighted how Fidelity Learning Center serves as an education tool used to demystify trading and meet customer needs by prioritizing timely insights, providing resources for beginner support and sourcing coaching sessions for advanced investors. We believe this banking tool aligns with the ‘radically transparent’ customer and their expectations.
Happy in the Stars
This customer dreams big but carries a contingency plan for a comfortable landing. The most important aspect of this customer’s financial health is ensuring a bank is there to help them meet their basic needs with a stress-free approach. This customer is open to dreaming big, but that is not the important part of their financial journey.
The ‘Happy in the Stars’ customer says, “Sure, I’ll shoot for the moon, but I’m very satisfied with landing in the stars if I miss. If there are too many sacrifices required, it’s just not worth it. I’m focused on living a stress-free life while ensuring I’m in a comfortable, stable financial place.”
An industry example worth highlighting Revolut and its “pockets” feature that automatically sorts bills and subscriptions on payday for auto-withdrawal. Revolut Shopper (Chrome extension) is another digital feature from the bank that helps customers find discounts for items while shopping online. These work to enhance the individual customer experience while supporting their comfort and stress-free approach.
All Access Pass
This customer is an active participant in their personal wealth and finance journey. They are looking to dive into the details with a bank partner that continually helps them grow and evolve as an investor.
The ‘All Access Pass’ customers says, “Show me everything I can do right now and show me how it will evolve so I can access new things. As my partner, I want a bank to show me what’s possible and share knowledge with me like a teacher. I want to keep growing and a bank should help guide me to the best routes.”
This customer would appreciate Wealthsimple’s Learn as it offers a close look into Personal Finance 101 advice (how much to save, where to invest and how to budget) along with blog posts highlighting recent finance news and a straightforward investing masterclass.
These seven customer themes share critical information so banks can shift to a life-centric focus and meet the mass-affluent customer needs in new, meaningful ways. As life continues to move quickly, a bank will need to act as a partner and deliver life-centric advice that centers on outcomes, ultimately helping customers navigate life. Today, banks have a significant opportunity to reconnect and build new levels of trust while driving growth within the mass-affluent customer segment.
The examples we’ve highlighted above show leaders moving ‘Beyond Advice’ today. But there is a lot of trapped value out there to drive growth. We unpack more in our ‘Beyond Advice’ report. Accenture’s 2022 research for ‘Beyond Advice’ focused on the wealth management and banking industries. The full report will be published in the next few months. For more information about life-centric banking and this report, reach out to us. We would love to connect.
Jess Murray, Managing Director – Accenture Song, Banking & Capital Markets Lead, North America
Scott Reddel, Managing Director – Capital Markets & Wealth Management
Adam Tomlinson, Accenture Song Growth & Business Designer, Beyond Advice Initiative Lead
Special thanks to Alex Convey, Accenture Song Financial Services Consultant, for contributing to this blog.