Delivering Holistic Financial Experiences to Consumers

The rise of artificial intelligence, big data, and cloud computing has fundamentally shifted how financial services are delivered. These advancements hold the potential for vast improvements in personalization and operational efficiency. As the volume of data generated by users and transactions continues to grow exponentially, financial institutions struggle to manage, process, and protect this data while ensuring its quality and integration into existing systems. Simultaneously, consumer expectations for retail banking solutions are reaching new heights. 

Modern consumers demand a seamless, intuitive, and highly personalized banking experience that is accessible across various devices at any time. These expectations increase pressure on banks and credit unions to innovate quickly. Competition from fintechs and neobanks adds another layer of urgency for regional and community financial institutions to evolve or risk losing market share.

Furthermore, financial institutions are kept on their toes with the changes in regulatory guidance. The heightened focus on data privacy and cybersecurity complicates the landscape, as financial institutions must fortify their defenses against an increasing number of sophisticated cyber threats.

Balancing these requirements while striving to meet consumer demands creates complex challenges for traditional financial institutions. Now, let’s dive deeper into these challenges and uncover opportunities for financial institutions to come out victorious by addressing their account holders’ needs and delivering retail banking solutions that empower consumers throughout their financial journey.

Challenge #1: Rising concerns for privacy and security 

The need to protect sensitive financial information poses significant challenges. Modern consumers may be hesitant to share their data due to privacy concerns, fearing unauthorized access or data breaches. According to Alkami’s eBook How Banks and Credit Unions Can Attract and Retain Gen Z, Generation Z (Gen Z) consumer preferences revealed privacy was more important to them than metrics such as speed.

On the other hand, financial institutions must ensure they comply with stringent data protection regulations to use account holder data from different sources. Balancing the demand for personalized financial services with the imperative to safeguard account holder data is a delicate task. It requires advanced security measures and clear communication about data usage policies.

There’s a fine line between the need for convenience and security. Consumers want their money faster, but they also want it to be protected. Financial institutions should enable consumers to initiate transactions swiftly and securely – whether that’s by instantly verifying and connecting accounts via instant account verification or by utilizing faster payments. 

Additionally, financial institutions should consider introducing identity protection solutions. While it may not seem to be a standard “security & fraud” feature, there’s a growing consumer need that positions this feature as a hot-button item for the primary financial institution relationship. Per an Experian article, “about 50% of consumers want their banks to offer additional protective measures. This creates an opportunity for financial institutions to fulfill the role of ‘data protector’ for the customers that depend on them.” Consumers know their data is out there, and they want a trusted advisor to help keep them protected and to alert them in the event of a breach.

Challenge #2: Disjointed financial relationships

Customers and members often have accounts and financial products across multiple financial institutions and fintech apps. This fragmentation creates data silos, making it difficult for both the account holder and their primary financial institution to access a comprehensive view of their financial health. 

According to Alkami’s 2023 Consumer Banking Trends survey of more than 800 digital banking users, there is opportunity in mining available first-party data and providing a holistic view of an account holder’s financial picture. In fact, 61% of survey respondents expect their financial institution to use their transaction data to personalize product offers and advice – fostering account holder trust and loyalty. 

By aggregating account holders’ external account data, financial institutions can provide personalized advice and better position themselves to grow share of wallet through targeted offers. Offering embedded financial applications, including spending analysis tools, goal-setting functionalities, and personalized financial insights, enhances the overall banking experience – empowering digital banking users to make informed decisions towards their financial goals.

Challenge #3: Ability to personalize support channels

Consumers access their financial institution’s digital banking solutions when it is most convenient for them – whether that’s during their lunch break or on a Sunday morning. When questions arise, account holders want instant answers. However, if they’re inquiring outside of traditional business hours, will they get the response time (and quality of support) they expect? According to an article from The Financial Brand, 65% of millennial and Gen Z survey respondents said they prefer to use a virtual assistant for customer service instead of waiting for a customer service rep to become available. 

Virtual assistants are breaking down the barriers to personalization. These artificial intelligence-powered tools not only transform the way users interact with their finances, but they also offer solutions tailored to the unique financial situations and goals of each user. By analyzing individual spending habits, savings goals, and financial histories, virtual assistants deliver customized financial advice to empower users to make informed decisions. This level of personalization was previously achievable only through one-on-one consultations with financial advisors. Now, it’s available digitally 24/7, right at the fingertips of consumers.

The benefits of virtual assistants extend beyond personalized advice. They offer real-time alerts and notifications for a variety of financial activities, from unusual spending patterns to bill due dates, helping users manage their finances proactively. Moreover, their ability to scale means that these personalized services are not limited to a select few – millions of users can enjoy a tailored banking experience simultaneously. 

Virtual assistants also play a crucial role in enhancing financial literacy, offering insights and advice in simple, understandable terms. By integrating data from multiple financial sources, they provide a holistic view of one’s financial health, further refining the personalization of advice and recommendations. In essence, virtual assistants are not just tools for financial management; they are personalized financial coaches, guiding users towards healthier financial habits and smarter financial decisions.

Strengthening relationships with retail banking solutions

These days, it’s easy to have a different app or service for just about everything – investing, sending money, monitoring monthly spending and credit score, identity protection, monitoring home value – the list goes on and on. Oftentimes, each digital relationship sends consumers to a new platform. 

At Alkami, we’re bringing all of the pieces together so that financial institutions can exceed their account holders’ expectations, deliver innovative fintech solutions embedded within the digital banking experience, protect consumer data, and uncover insights into competitively-held relationships. 

By embracing innovative new technologies, financial institutions can effectively aggregate and analyze diverse data sources – providing a comprehensive view of a consumer’s financial picture. These strategic areas enable financial institutions to not only meet but exceed expectations, offering insightful, personalized financial guidance that empowers consumers to make informed decisions. In the rapidly evolving financial landscape, this is the competitive edge financial institutions need to strengthen the banking relationship.