Delivering a Personalized and Predictive Digital Financial …solutions.yodlee.com/rs/789-EJH-884/images/EB-Delivering... · 2020-04-30 · Delivering a Personalized and Predictive

Delivering a Personalized and Predictive Digital Financial Management Experience

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Delivering a Personalized and Predictive Digital Financial Management Experience7 Challenges of Traditional Personal Financial Management Tools and How to Create Tools That Succeed.

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Table of Contents

Introduction 3

PFM Challenge #1: Data Overload 4

PFM Challenge #2: Engagement 6

PFM Challenge #3: The Willpower Problem 8

PFM Challenge #4: Need a Big-Picture View 10 PFM Challenge #5: Greater Insight 12

PFM Challenge #6: Too Tedious 14

PFM Challenge #7: Lack of Personalization 16

The Secret to Success: Get Personal and Predictive 16

Envestnet | Yodlee Sense: Combining Data Analytics with Behavioral Psychology 17

Conclusion 18

© 2016 Envestnet | Yodlee.™ All rights reserved. Technology protected by one or more U.S. Patents or Patents Pending. Use subject to license terms. May include materials developed by third parties. Yodlee and the Yodlee Logo are trademarks or registered trademarks of Envestnet | Yodlee in the U.S. and other countries. All other trademarks mentioned in this document or website are the property of their respective owners.


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Introduction

Consumers today expect highly digitized and personalized experiences online and through mobile devices. Yet, when it comes to their financial institutions, a recent survey revealed that 43 percent of banking customers said they felt disconnected from their financial institutions and that their bank did not know them personally. Customers also said their financial institutions provided advice only on the financial institution’s terms, in the branch and during banking hours, if at all.1

In order to respond to their customers’ need for digital interactions, many financial institutions have implemented Personal Financial Management (PFM) tools; yet, these tools have largely been a disappointment to the industry, with low adoption rates.2 Read on to see why PFM tools have been challenged, and how financial institutions can reform tools in order to revolutionize the customer experience.

1 Bradley, Joseph, Jeff Loucks, Paul Jameson, Kathy O’Connell, and Joel Barbier. “Reimaging the Digital Bank How U.S. Banks Can Transform Customer Interactions To Increase Profitability.” Accessed June 17, 2015.2 “The “F” in PFM Should Stand for “Fail”: 3 Ideas on How to Fix PFM.” Bria Strategy Group. July 2, 2014. Accessed June 8, 2015.

“43 percent of U.S. customers believe their primary financial institution does not understand their needs; 31 percent feel their financial institution is not helping them reach their primary financial goals.”1

http://www.americanbanker.com/issues/178_39/what-consumers-want-in-pfm-tools-hint-not-pie-charts-1057082-1.html



Big Data Advantage #1:

Data Overload


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Lack of information generally isn’t the problem with most PFM tools. On the contrary, many PFM tools provide data rich dashboards and visualizations of static historic data that overwhelm the average user, who struggles to understand what all the data means. As a result, users spend more hours and effort interacting with their PFM tools then they’d like. Even sophisticated PFM users prefer tools that require less time.3

PFM tools today provide lots of information, but no help making decisions.4

3 Wisniewski, Mary. “Bankers Struggle to Reimagine PFM for Mobile.” American Banker RSS. May 23, 2013. Accessed June 8, 2015.4 “The “F” in PFM Should Stand for “Fail”: 3 Ideas on How to Fix PFM.” Bria Strategy Group. July 2, 2014. Accessed June 8, 2015.



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PFM Challenge #2:

Engagement


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From viewing aggregated account balances, to receiving financial alerts to earning rewards, the consumer wants it all. The problem is they don’t want to expend much energy to receive these benefits.5

5 Marous, Jim. “Next Gen PFM: A Great Contextual Mobile Banking Offer.” The Financial Brand. July 30, 2014 Accessed June 18, 2015.

Traditional PFM tools less than optimum when it comes to fostering regular engagement. Most PFM experiences today still require users to be proactive about monitoring their finances. Despite intuitive interfaces and nice looking charts, people still have to take the time and effort to log in and check what is happening.

http://www.forbes.com/sites/nextavenue/2012/10/15/online-money-management-tools-fail-to-deliver/

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PFM Challenge #3:

The Willpower Problem


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A part of every consumer’s New Year’s resolutions, the desire to budget, save, invest, and spend more wisely has always been easier said than done.6

Existing PFM tools haven’t quite figured out how to solve the willpower problem. Users have to motivate themselves and exercise self-control to adhere to their budgets, which can be difficult, if not impossible. When it comes right down to it, all the tracking and visualizations tools in the world can’t compare to the desire for a new pair of shoes or a trip to Hawaii. Many PFM tools can’t predict these types of spontaneous purchases or help users plan for them.

6 Marous, Jim. “Next Gen PFM: A Great Contextual Mobile Banking Offer.” The Financial Brand. July 30, 2014. Accessed June 18, 2015


PFM Challenge #4:

Need a Big-Picture View



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7 Wisniewski, Mary. “What Consumers Want in PFM Tools (Hint: Not Pie Charts).” American Banker. February 27, 2013. Accessed June 8, 2015.

“49 percent of consumers expressed a desire to use an account aggregation capability in a recent survey.”7

In a study of U.S. consumers, nearly one in two respondents said they would like their financial institution to provide a single view of all their financial accounts in one place.7 Consumers want a holistic view that shows them how their financial life is performing. If financial institutions don’t offer PFM tools with account aggregation capabilities, customers will go elsewhere to find these tools.

http://www.millennialdisruptionindex.com/

PFM Challenge #5:

Greater Insight

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“PFM vendors and banks will only succeed if the focus moves to creating context-sensitive insight and functionality that helps consumers make good financial decisions.”8

While it’s helpful for consumers to see how their financial lives are performing, consumers also need to know what to do to improve the performance. Forward-looking cash flow capabilities can help consumers get a glimpse of their financial future, but these capabilities by themselves are not enough. In order to be truly useful, cash flow forecasting tools need to put the data in context for consumers and even combine the data with actionable advice to help consumers make smart financial decisions.

8 Frank Bria, author of “Seven Billion Banks: How a Personalized Banking Experience Will Save the Industry.”



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PFM Challenge #6:

Too Tedious

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Early PFM tools were all work and no play – and though the visual deliverables were fantastic, the process was far from fun, states publisher Jim Marous in a recent article for The Financial Brand.8 In another report from Forrester Research, recommendations for making PFM solutions more viable include providing useful advice that is easy and fun to use. Forrester notes that in order to increase adoption, digital money management experiences need to meet customers’ needs, be easy, and be enjoyable.9

Successful PFM tools understand the consumer (using both internal and external data), make the process as seamless as possible, promote ongoing engagement, and offer tangible and intangible incentives.9

8 “Marous, Jim. “Next Gen PFM: A Great Contextual Mobile Banking Offer.” The Financial Brand. July 30, 2014. Accessed June 18, 2015.9 Walker, Stephen. “Best Practices In Digital Money Management.” May 10, 2013.



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PFM Challenge #6:

Lack of Personalization

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Consumers want help in making sense of it all, and are expressing an interest in tools that offer deeper insights and guidance into their everyday finances.10

Above all else, one of the main reasons that typical PFM tools are challenged is due to their inability to provide relevant insight and personalized advice. While many PFM tools today show users where their money is, they fail to show users how their money is doing in relation to their goals. They also miss the opportunity to provide personal recommendations to users on how they can improve their financial lives.

10 Wisniewski, Mary. “What Consumers Want in PFM Tools (Hint: Not Pie Charts).” American Banker. February 27, 2013. Accessed June 8, 2015.



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The Secret to Success: Get Personal and Predictive One of the biggest opportunities yet to be addressed with existing PFM tools is to foster deeper consumer interaction through progressive engagement and personalized, curated content.

By contextualizing customer data and combining it with user-centered customer-design, financial institutions can use PFM tools to get a deeper glimpse into their customers’ lives and engage with them on a more personal level. As financial institutions gain a more thorough understanding of their customers and what drives them, they’re uniquely positioned to provide their consumers with a predictive and personalized digital financial management experience to help them meet their unique financial goals, get a consolidated view of their finances, and make smarter financial decisions.

“PFM is primed to evolve beyond a niche product… into a virtually ubiquitous, suite of online and mobile tools that help consumers make smarter everyday financial decisions anytime — even on the go.”11

11 “Consumers Are Ready For PFM Whenever Their Banks And Credit Unions Are.” The Financial Brand. March 6, 2013. Accessed June 19, 2015..


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Combining Data Analytics with Behavioral PsychologyGoing beyond typical PFM tools, Envestnet® | Yodlee® Sense combines behavioral psychology principles with data clustering capabilities to predict what a financial institution customer needs over time and works to help customers meet their goals.

Built on the Envestnet | Yodlee Financial Data Platform of over 15,000 global financial data sources, Yodlee Sense mines data in the background to offer a behavioral and intelligent data-driven design that resolves the constraints that usually lead to failure – like lack of resources, attention, cognitive capacity, and self-control. The uniquely personalized user experience predicts users’ future account activity and proactively provides simple, actionable guidance. The app runs consumers’ financial data through Envestnet | Yodlee’s personalization engine to determine financial income and expense patterns, debt to income ratio, and average cash on hand. The app leverages this transaction data as well as consumer input to predict future account activity and proactively provide personalized and actionable insights, tips, and recommendations to help users navigate their unique financial journey.


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Conclusion

All in all, typical PFM tools have run their course. In order to foster deeper consumer interaction, financial institutions need to evolve their current offerings with tools and services that create a more personalized and predictive experience.

Financial institution customers want to feel valued. Financial institutions that effectively use data, analytics, and tools can strengthen their relationships with customers, deepen customer engagement, and encourage sound financial habits and behaviors while increasing revenue opportunities through digital financial management.

How can I learn more?

• Download the whitepaper: “The Digital Financial Revolution Is a More Personalized and Predictive Experience. Are You Ready?”

• View the demo: Envestnet | Yodlee Sense from FinovateSpring 2015

• Download the data sheet: “Envestnet | Yodlee Sense”

For more information, visit: www.yodlee.com.

http://www.yodlee.com/resource/the-digital-financial-revolution-is-a-more-personalized-and-predictive-experience-are-you-ready/

http://www.yodlee.com/resource/yodlee-sense/

http://www.yodlee.com/resource/yodlee-sense-datasheet/

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© 2016 Envestnet | Yodlee.™ All rights reserved. Technology protected by one or more U.S. Patents or Patents Pending. Use subject to license terms. May include materials developed by third parties. Yodlee and the Yodlee Logo are trademarks or registered trademarks of Envestnet | Yodlee in the U.S. and other countries. All other trademarks mentioned in this document or website are the property of their respective owners. Yodlee 391 07/16

Documents

Delivering a Personalized and Predictive Digital Financial …solutions.yodlee.com/rs/789-EJH-884/images/EB-Delivering... · 2020-04-30 · Delivering a Personalized and Predictive