Digital intelligence: Creating human-centered financial services

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Identifying new services from customer needs

Many of the words used for personal and business finance are losing their meaning as the rapid transition to digital services continues. Consumer use of checks is a fraction of what it used to be, down about 60% over the last 15 years,1,2 yet the accounts are still called ‘checking’ and most banks continue to provide checkbooks when accounts are opened. And the reason for a savings account, once a prerequisite to building wealth, is now less clear thanks to low interest rates and the availability of so many low cost and seamless savings and investment options.

The ability to bank anywhere has created a mindset shift as financial services can follow consumer needs wherever they go. These expectations are not always taken into account when creating new products and services. Focusing on how consumers think about spending can provide clues to the direction of banking innovation. This customer-centric mindset also reveals some of the reasons new services have been able to emerge so quickly.  

Many of the recent trends in banking have started with customer-centric starting points:

  • “I don’t have enough money to save.”
  • “I want to be able to split the bill.”
  • “I should be able to use my phone to pay.”
  • “My child is going to college.”

But many banks have focused on making spending easier, with less attention paid to intuitive, customer-centered methods that create new services.

It is more than mobile banking

The evolution of digital banking has in large part been a repackaging of the bank branch into an app. Mobile banking products are mostly an iteration of the traditional bank with much of the focus on ease of use and much less on the development of new services. This repackaging often involves a baseline generic experience with table stakes features and doesn’t necessarily meet the evolving consumer expectations for intuitive services.

Traditionally, the purpose for a separate checking and savings account was to split spending now from spending later. Checking is a way to manage day-to-day finances and safely pay a specific person or bill, yet how consumers transfer money or make payments is changing.

With the shift from checking to online to mobile banking, requirements for other basic bank services have continued to shift as well—group payment for a bill, automated investments, and reimbursing friends. Many new consumer financial services started by finding a real-life problem and providing a solution the moment it is needed. The ease of use of these newer services often allows the consumer to forget they are even making a financial transaction.

Consumers use financial services very differently today. Instant personal loans are increasingly part of ongoing money management, and services that can automatically invest small amounts of spare cash are removing the anxiety from the investment process and changing how we save. From the bank’s perspective, providing these services can be more than just evolving to meet consumer behavior. They can have a direct impact on retention and repeat business, positively affecting the lifetime value of the consumer.

Looking at specific consumer behaviors reveals the potential for services:

Proxy payment

The evolution of digital has also enabled areas like proxy payment. Take, for example, an employer who authorizes an employee to make a one-time trip to a specific store to buy a specific product for a specific amount. Rather than fronting the cash, cutting a check, or dealing with expense accounts, many businesses now use reloadable gift cards. In fact, the term ‘gift card’ no longer applies to how the cards are really used—another reason names for new services are so important in this area. This model has given some retailers more ‘gift card’ or stored value on hand than some medium-size banks.

Proxy payment services are an opportunity for banks and retailers to create more flexibility for customers. Allowing the account holder to define the place and amount for a proxy spender provides a significant improvement over cash transactions. Banks can even create ‘proxy payment dashboards’ where account holders can see and manage their payment credentials—a simple way to increase engagement while aligning with consumer use.

Looking at this payment distribution model, we also see interesting extended spending models for families, college students, and other groups, each person spending on the account, but only at predefined locations.

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Savings to spend later

The traditional role of a savings account was to set aside cash for a future purchase, but some research suggests that consumers who know exactly what they are saving for are more likely to have discipline in setting funds aside. The fact that 40% of US adults cannot cover an unexpected expense of $4003 says a lot about our ability to save, and perhaps specifying very specific buckets or goals (e.g., emergency, weekly meal out, annual vacation) within a broader savings product repositions how consumers will in fact save.

A defined time until the purchase is made can also indicate to the consumer how that money should be invested. For example, some 529 college savings plans simplify the “spend later” decision-making process. Instead of describing the complicated investment process with an array of mutual fund offerings, they offer simple, age-based options with a more aggressive allocation for younger children that transitions to a more conservative allocation as the child approaches college age.

A good consumer-aligned way to think about savings is through a specific target and timeline while mitigating the angst of the investment process. This consumer-centric mindset can be used in all areas of financial services by positioning solutions to address particular concerns rather than offering a confusing list of products.

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Invest in what you know

Putting off investing can cost individuals financial security. How can the market feel more familiar and fit in with existing areas of knowledge and interest? Perhaps by looking at companies or industries consumers like or know something about.

For individuals who are starting an investment journey, can a bank look at purchase history or product ownership to help suggest investments in companies that the consumer recognizes? Perhaps this more tangible approach of investing with spending patterns can help remove the fear of the investment process and empower first-time investors to think about being shareholders as well as consumers. If the stock goes down, they become interested in why it went down, providing an entry point for understanding the market a bit better. What influenced the downturn? Are other companies involved?

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A fresh look at financial services

The financial services landscape is extremely complicated, but customers can’t be asked to simply adapt to existing financial products and services. Many non-banks and FinTechs are pursuing a broader set of ‘money’ services that include lending, payments, savings, and deposit features while hiding this traditional bank terminology. This changes the dynamic and puts the onus on banks to develop financial services to meet customer needs rather than the other way around.

As digital is increasingly required to deliver growth, the focus will shift from thinking of digital as a channel to the development of products that align with how consumers will use them. This involves taking a hard, detailed look at consumers, understanding their psychographics, and developing new features that intuitively deliver what consumers want when and where they want it, all while surrounding the entire ‘financial event’ in a satisfying experience. Many organizations have this goal, but few deliver on it. And this presents the opportunity to lead and differentiate as digital increasingly becomes mainstream.


“The Federal Reserve Payments Study 2016”, December 2016, A Federal Reserve System publication

“The Federal Reserve Payments Study: 2017 Annual Supplement”, December 2017, A Federal Reserve System publication

“Report on the Economic Well-Being of U.S. Households in 2017”, May 2018, A Federal Reserve System publication

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Julien Courbe

Financial Services Leader, PwC US

Scott Evoy

Financial Services Advisory Digital Leader, PwC US

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