“I been laid off from work
My rent is due
My kids all need
Brand-new shoes
So I went to the bank
To see what they could do
They said, son — looks like bad luck
Got a hold on you
Money’s too tight to mention . . . ”

If you were around in the Eighties, you might remember the lyrics from that song by UK band Simply Red. Money is a fundamental part of life and central to people’s health and well-being. However, many individuals today do not feel confident or knowledgeable enough when making decisions about financial products and services. That can create stress and anxiety. Far too many fall into the financial traps of overspending and debt or even find themselves excluded from the formal financial system altogether. Few get tailored financial advice.

I am kicking off a new stream of research that aims to define what the future of financial experiences will look like in the next 5–10 years and would like to invite you to take part in that research.

Now is the time for the retail financial services industry to take a much more proactive, holistic approach to customers’ financial well-being. Financial services providers need to focus on customer-outcome-driven solutions and shift the dial from the cost of remediation programs to investment in prevention — particularly focusing on financial capability and well-being, which is defined as:

A state of being in which a person can fully meet current and ongoing financial obligations, feel secure in their financial future, and is able to make choices that allow enjoyment of life.

Technology presents a huge opportunity to achieve major improvements in supporting the financial well-being of billions of consumers while at the same time rebuilding trust and confidence in our financial system. Digital technologies (APIs, AI, automation, etc.) are already changing how customers manage their finances and plan for their future. Fintech disruptors such as Acorns, Starling Bank, and WeBank have introduced innovative business and pricing models that are mobile- and digital-first. Adjacent industry players and big tech firms are also venturing into financial services and digital money management and financial advice, leveraging AI, machine learning, big data, and network effects to acquire new customers and drive financial inclusion. In response, incumbents like BBVA, Commonwealth Bank of Australia, and USAA are improving their own digital capabilities to attract and retain existing customers.

USAA’s Financial Readiness Score

As digital and mobile technologies continue to reshape the everyday life of consumers, this trend is also having great impact on multiple aspects of the retail banking, insurance, and investment management value chains: How customers interact with their financial providers; how they budget, save, and invest for the short and longer term; how they research their financial needs; how they manage financial hardships; how they protect themselves; and how they receive financial advice are all fundamentally changing.

The changing behavior and expectations of customers are forcing financial services providers to rethink how they can use digital capabilities to improve customer experience and deliver new sources of customer value while embedding financial capability and well-being in their core product and service offerings. Everybody wants to “own” the customer, but customers don’t want to be owned. Retail financial services firms will need to transform and shift their strategies to differentiate on trust, going beyond product-centric selling and offering more holistic and personalized customer value propositions that support and sustain customers’ financial well-being.

To inform that research, I am looking to speak with senior digital strategists at large financial institutions such as Lloyds Bank and Prudential, fintechs such as Monzo and Qapital, and technology providers such as Ant Financial and Apple to gain a broader perspective on how financial experiences will evolve in the next 5–10 years and the impact this trend will have on data, product, and technology strategy. Below is a sampling of the topics I’m looking to address during the interviews:

  • What are some examples of existing products and services that help consumers improve their financial health? How popular are they?
  • Why should improving customers’ financial well-being be a strategic goal for financial institutions?
  • Which firms are best positioned to help customers improve their financial well-being: banks, financial advisors, investment management firms, insurance companies, insurance agents, startups, technology giants, or other types of companies?
  • What role will digital technologies play in improving financial capability — both day-to-day and through significant life events?
  • What role will digital technologies play in enabling wider financial inclusion?
  • What will the unintended consequences of financial advice regulation be?
  • How can financial institutions consider financial capability as part of business cases for developing new products, services, and features and link improving customers’ financial well-being to financial performance?
  • How can financial institutions define, plan, and execute their financial well-being strategy?
  • What core and next-gen capabilities and features will be needed to power future financial experiences?
  • Will financial institutions build, buy, blend, or partner to enhance or build their capabilities?
  • How will financial institutions embed financial capability in the design and development process of their core product and service offerings?
  • How can financial services firms weave behavioral science into the design of their financial experiences?

If you’d like to be interviewed as part of that research, please reach out to me at alhostis@forrester.com.