FinTech Applications & Tools for Financial Health
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During my presentation in March in Kyiv, Ukraine, I shared global examples of FinTech tools and applications that can not only support greater financial inclusion but, more importantly, can address the overall financial health of customers and improve consumer protection.
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FinTech Applications & Tools for Financial Health
- 1. Kyiv March 2018 FinTech Applications & Tools for Financial Inclusion
- 2. 1 FinTech Solutions & Financial Inclusion Financial Inclusion Financial Health Access Usage Quality
- 4. 3 Financial Health Tool: Juntos Global
- 5. 4 Financial Health Tool & Banks
- 6. 5 The Case of Banco Colombia’s Financial Advisor Emilia Emilia has held text conversations with more than 257,000 customers. Increase the active use of savings accounts Along with active usage, average balances have also grown Some Emilia conversations with Saving at Hand customers: Emilia: Saving is the sure way to advance towards your goals. Tell us what motivates you the most to maintain your goal of saving. Client: What motivates me is to take my family forward and keep fighting.
- 7. 6 Financial Health Tool: Arifu
- 8. 7 Arifu: Financial Literacy Training Tool
- 9. 8 Key Financial Service Access & Usage Issues Access & Usage Contingency Planning Buffer Savings Insurance Wealth Creation Long-Term Savings & Investment for Retirement Credit Business Loans Consumption Loans Emergency Loans Housing Loans
- 10. 9 FinTech Solutions: Personal Finance Tools Mint allows you to track your expenses, it allows you to set goals, or sign up for alerts if your spending in a particular category gets out of hand.
- 11. 10 FinTech Solutions To Address Access & Usage Issues: Loan Aggregator Tools
- 12. 11 FinChatBot: Holly – Reduces Call Center Costs – Multi-platform deployment – Natural human-like interaction – Flexible and tailor-made – Machine learning allows it to learn about the customer FinTech Solutions to Address Access & Usage Issues
- 13. 12 FinTech Solutions to Address Access & Usage Issues
- 14. 13 FinTech: Addressing Consumer Protection Proactively “Finance, fairness, and Facebook: use complaints to protect your bank” JoAnn Barefoot, Former Deputy Comptroller of the Currency
- 15. 14 RegTech: Philippine Consumer Protection Chatbot Source: R2A
- 16. 15 FinTech: Improving Quality of Financial Services, The Customer Perspective Customer –Solutions must be understandable and easy to implement. –Hassle-free solutions, with notifications delivered ideally via existing platforms –Data security must be an absolute priority, and highlighted to the customer. –Get a human to verify any complex financial situations. –Allow option to speak to a human for additional support.
- 17. 16 FinTech: Improving Quality of Financial Services, The Industry Perspective Financial Service Industry – New FinTech applications should be Embraced by bank employees Replace the diagnostic stage of financial advice Provide the financial advisors with the right information they need – NO complicated interfaces – Employees could use to applications to accomplish certain functions. – New customers can come from new customer experience. – Personalized CRM data to customize services – Deal with questions before they become complaints.
- 18. 17 Thanks John Owens Senior Digital Financial Services Advisor johnvowens@me.com Follow me on Twitter at @jvowens
Editor's Notes
- New approaches to not only provide access and usage of financial services via new technologies but also new methods to address “financial health of individuals” and even to improve regulation and supervision via RegTech
- Juntos was a Winner of a Challenge in Mexico to improve Financial Health of clients. Banks can provide staff and agents with digital tools to compensate for some of the weakness of human interactions—such as inconsistency, misinformation, or bias. Digital tools can help agents provide consistent information and gather responses efficiently from customers. When banking agents are equipped with tablets, their ability to provide accurate product information is improved. Going one step further, digital tools could be used to create richer interactions with customers. As new apps and voice and video features expand communications capabilities, and as artificial intelligence advances, providers could create richer digital customer interactions with some of the same features that a person-to-person interaction provides. It is now possible to build interfaces with data flowing in two directions to answer customer questions, provide nudges and reminders, help build financial capabilities, and receive regular customer feedback. This future is already closer than one may think. Juntos, for example, is a platform that allows financial institutions to carry on personalized, electronic conversations with customers through text messages. Juntos’s powerful data analytics can tailor messages to customer behavior. The friendly style of the messages suggests the presence of a person, and indeed, Juntos reports that many customers share personal news and even wish Juntos a Merry Christmas during the holidays. Through the two-way data flow, customers gain a sense of connection to the institution, support for financial discipline (via reminders), and information about products. At the same time, institutions hear from customers more often. The financial inclusion sector has barely begun to explore these possibilities. It deploys technology mainly to select customers and perform transactions. But as these basic digital functions are increasingly available, the sector may soon need to focus on creating rich, multifaceted customer interactions that capture more of the benefits of a person-to-person interaction. Customer engagement, facilitated by a combination of technology and the strategic use of people, could be the next competitive frontier.
- Three Trends Impacting Growth of Conversational Banking According to Accenture, three trends are coming together to support the transition from transactions to interactions. Messaging is now the preferred method of interaction: WhatsApp, Facebook Messenger, WeChat, Telegram, Snapchat, etc. have overtaken social media as the preferred way of communication on mobile devices. They are both simple and intuitive, leveraging text or voice-based interfaces. These apps also are AI-ready, offering easy integration with chatbots and cognitive agents. AI is now accessible to all organizations: The decreased cost of data storage, analytic tools and development in machine learning and deep learning enables the automation of repetitive customer support tasks, and lower level advisory services. Over time, AI will enable more advanced interactions at even lower costs. Mass personalization is now possible: The intersection of big data, advanced analytics, and predictive models is enabling personalization at a mass level. This supports vastly improved consumer experiences while increasing expectations of all financial services providers based on the delivery of services across industries.
- Bancolombia is one of these banks, partnering with Juntos, a fintech firm, in 2013 to create Emilia, a chatbot designed to build customer relationships and trust. To this end, Emilia sends out regular and personalised messages to customers, such as reminders to save, or money management tips. In turn, customers can tell Emilia about their financial goals and are able to ask any questions relating to financial products. By combining data on product usage with data from these conversations, the bank can ensure it sends out the most relevant messages. The investment has paid off; last year Bancolombia announced that it had seen an increased account use, as well as higher average balances following the introduction of its chatbot service. Bancolombia revealed that more than 257 thousand people have received recommendations on the management of their money thanks to Emilia, the robot that also offers its clients savings goals and interacts with them to know the dreams they want to save for. The banking company highlighted that in its search for methods to connect more and more with its customers of Saving to the Hand - the account of financial inclusion that works through the cell phone and that today reaches four years of service - Bancolombia created this innovation, which consists of a chatbot through which a character named Emilia speaks to customers of this service encouraging them to save and offering them day-to-day solutions on the management of their accounts through SMS text messaging. "SMS messaging, available to customers without the need to download applications on the cell phone, has allowed us to reinforce the objective of Saving at Hand not to depend on high-end cellular phones for its operation. This has been key to reach thousands of people who, otherwise, would not have had the opportunity to access the financial world or be guided in their way of saving, "explained the financial company. "Together, it can be considered a pioneering exercise. Chatbots, this form of personalized and automated communication between companies and customers, existed long before Facebook announced in 2016 that companies would be able to connect with their audiences through Facebook Messenger. The chatbot of Ahorro a Mano has been able to adapt to the reality of the people it serves, "said Mauricio Múnera, Bancolombia's director of Financial Inclusion. Through this strategy he has managed to increase the active use of the account and the average balance of the product, among other things, which translates into more people saving to fulfill their dreams. Emilia has held personalized text conversations with more than 257,000 Saving at Hand customers. Some Emilia conversations with clients: Emilia: Use your cell phone to take a photo of what motivates you to save. It can be something you want to do with your savings or a picture of your family. Be creative! Client: We can not send the photo because our cell phone does not have a camera, but the savings we want to make is for a house because the one we have is bahareque. Emilia: Saving is the sure way to advance towards your goals. Tell us what motivates you the most to maintain your goal of saving. Client: What motivates me is to take my family forward and keep fighting.
- One of the biggest moves today is the transition we are witnessing from physical debit/credit cards (in markets where they are common) to virtual mobile cards.
- One of the biggest moves today is the transition we are witnessing from physical debit/credit cards (in markets where they are common) to virtual mobile cards.
- In fact the entire global mobile payment industry driven by FinTech is one of the fastest pacing developments we have seen and is projected to be a trillion dollar market by 2019.
- In fact the entire global mobile payment industry driven by FinTech is one of the fastest pacing developments we have seen and is projected to be a trillion dollar market by 2019.
- Action steps for turning complaints into actionable data Here are practical steps for mining and using complaint information found on social networks: • Define what constitutes a unfair, deceptive, or abusive acts and practices (UDAAP) complaint. Many customers complain about poor service. Others object to legitimate bank actions that simply cannot and will not be changed. Still others allege violations of specific laws and regulations. UDAAP complaints generally don’t fit any of these categories (although they may blend with them). Instead, they usually have three characteristics: 1. They involve the bank’s intentional design of a product or practice, not the actions of an individual employee. 2. They typically involve product features or practices that are fully compliant with technical rules. 3. Customers think that the bank’s action is unfair, deceptive, or abusive, despite that technical compliance. Almost every institution engages in practices that could be seen as controversial and that could raise UDAAP problems. Some of these practices may not even generate complaints directly to the bank, but are still seen by examiners as red flags. All banks need to understand these emerging risk issues. The only way to manage such UDAAP risk is to flag and address potentially vulnerable practices long before the government bans or regulates them. Monitoring social media is a great way to find them. Every bank should be reviewing overdraft policies to respond to current agency guidelines and to rethink any aspects that are generating consumer anger. • Pinpoint the specific practices raising complaints. • Decide whether--and how—to join the discussion Reevaluate products and practices. Anything that is generating customer anger should be revisited, so that the bank can confidently defend all its practices as fair and transparent.
- Gives Filipinos effective access to a new avenue for complaints resolution Allows automation and checking of complaints Gives the Philippine Central Bank (BSP) visibility over customers’ experience Allows the Philippine Central Bank to verify providers compliance with consumer protection and resolution mechanisms guidance Determines patterns and structuralizes complaints for machine learning opportunities
- Customer Solutions must deliver responses to make advice easy to understand and implement for the customer. They must be hassle-free, with notifications delivered ideally via existing platforms such as Viber, Facebook Messenger, Telegram, WhatsApp Data security must be an absolute priority, and highlighted to the customer. Pledges must be implemented to always get a human to verify any complex financial situations. In addition, customers must have the option to speak to a human for additional support in the event of an applications fails to fully assist them.
- Financial Service Industry New FinTech applications should be embraced by bank employees as a way in which to replace the diagnostic stage of financial advice, and provide the financial advisors with the right information they need to support their product and customer. To obviate the need for complicated interfaces and extended training, store- and phoned-based employees could use to applications to accomplish certain functions. For early adopters, new customers will be encouraged to use the services of financial service providers due to the technological innovation in customer experience. Relevant, personalized CRM data on customers can be surfaced to customer service agents at the ideal time to deal with questions before they become complaints.