Research by Truaxis, formerly BillShrink, finds that the vast majority (88%) of bank customers would like to gain insights into their purchasing behavior within their online banking statement versus registering their financial information with a separate website.

The survey further revealed that customers want to know how their spending habits compare against the national average, as well as how it compares to people who are similar to them. Additionally, 62% surveyed report that they’d like recommendations on merchants they would enjoy based upon the analysis of their transaction history and the aggregate shopping habits of millions of people like them.

The opportunity for financial institutions to start delivering these services comes at a critical time for the banking industry as revenue-restricting regulations and the rise of account fees have further strained the bank-consumer relationship. New banking services like Truaxis’ StatementRewards are emerging to make interactions more “carrot” and less “stick” by leveraging the transaction data stream to offer value to the merchant and the consumer in addition to the financial institutions, the company says.

Financial institution customer relationships are under pressure from direct-to-consumer providers that are able to quickly deliver richer services that meet evolving consumer demands. These providers are thereby disintermediating the FI-consumer relationship. However, results indicate that financial institutions have a distinct advantage over other providers and are well positioned to become advisors to their customers and help them manage their finances. Not only do banks have access to transactional data without customers having to share login information to third-party providers, but banks are also more trusted by consumers when it comes to managing this data—enjoying a 3:1 trust advantage according to industry research firm Javelin.

 

Data-driven personalized services deliver highly personalized offers, savings on common monthly expenses, loyalty merchant rewards, recommendations on places to visit and shop, as well as insights into where customers are spending their money and how their spending compares with others. All of these services are generated from the customers’ transaction history and shopping preferences, with the ultimate goal of delighting the consumer, driving richer channel experiences and strengthening the existing relationships with their FIs. Over the next three years, it is projected that issuer and vendor revenue from data-driven personalized services will exceed $3.5 billion and gross transactions from in-statement purchase activity will reach $155 billion (Aite Group “The Case for Merchant-Funded Incentives: New Opportunities for Card Issuers,” June 2011)

In addition to identifying customer demand for free financial tools delivered by their banks, the Truaxis survey revealed further value financial institutions can derive from data-driven services:

 

 

Driving top of wallet card preference and shift of spend—More than 8 in 10 people prefer to consolidate reward programs all on their existing bankcard versus having to manage/carry separate loyalty cards. Seventy-six percent of bank customers would consider applying for a new bank card if their current bank did not offer loyalty rewards. Exclusive personalized bill analysis compares customers’ largest recurring expenses against millions of available plan options to unearth savings. Nearly 90% of users indicate they’d like to receive personalized bill analysis on monthly expenses—an average $5,000 spend shift that can be won by banks while helping consumers save thousands of dollars annually through expense optimization. Furthermore, consumers engage with savings on their expenses, three times more than with personalized discounts.

 

 

Encouraging better engagement with online and mobile features—Conversion of nononline customers to online banking and bill pay is expected to total a cost reduction of $167 per account each year or $8.3 billion annually.(Javelin Strategy & Research, “Personal Finance Management, Part 1,” November 2011) Seventy-one percent of users would be more likely to use a mobile banking app if it offered real-time, location-based offers from their favorite merchants.

 

 

Creating more valuable and deeper relationships with consumers—For example: 68% do not use PFM tools to manage their expenses. A large majority of surveyed users (88%) indicated however, that they’d like to see PFM features like gaining insights into their purchasing behavior within their online banking statement versus registering their financial information with a separate website. Also, 67% of users want to know how their spending habits compare against the national average, as well as how it compares to people similar to them, and 62% of users report that they’d like recommendations on merchants they would enjoy based upon the analysis of their transaction history and the aggregate shopping habits of millions of people like them.

“With banking going through significant pressures of regulation, as well as big changes in consumer expectations of their financial providers, financial institutions are looking for ways to drive richer relationships with their consumers and drive engagement via online and mobile channels,” says Schwark Satyavolu, cofounder and CEO of Truaxis.

http://www.truaxis.com/press/press-releases/truaxis-survey-finds-88-of-people/