Financial empowerment as a means for New Growth in the banking sectorby Maria Meermeier
The topic is more topical than ever: financial security.
Pension gaps are growing, the base rate is rising. People have to deal with their own financial situation and take care of their financial affairs (themselves). But people can only take care of their finances if they really know what they're doing. This is where banks and established financial institutions have a responsibility.
They must provide their customers with the necessary knowledge to enable them to make informed financial decisions. Financial empowerment is the word of the day.
How financial empowerment can work can currently be seen at GenZ: "Finfluencers" such as Finanzfluss, Madame Moneypenny, Finanzrocker and Fortunalista are perfectly suited to the young target group with digital affinity. But what about the big rest?
Financial empowerment is not only a nice customer service, but above all an effective and long-term tool for customer retention. As a nice side effect, the potential acquisition lever that exists here should not be underestimated either. Financial empowerment is a grateful breeding ground for new growth.
Financial empowerment through knowledge
At the beginning of financial empowerment is knowledge. And that's where the complexity of the subject begins. The knowledge levels of customers are just as broad as the target groups of banks. From stockbrokers to schoolchildren to pensioners, all kinds of groups are represented. It is not easy to pick up everyone at their individual level of knowledge and to create an offer that ideally brings everyone to the same level of knowledge. Here, it helps if banks understand their own customer journey and critically scrutinize it. This gives them the opportunity to combine all the important information for customers from different target groups in an easily understandable structure.
Tomorrow Bank provides a good example of what such a customer journey might look like. As is usual for neobanks, without physical branches, but with an excellently designed app. It's child's play to manage your own finances, set up savings plans, view transactions, and also provide general background information on what actually happens to your money when you entrust it to Tomorrow Bank. If something goes wrong, customer support can be reached by e-mail, live chat on the homepage, in the app, or in the traditional way by phone. Everything is just a click away.
This means customers can start where they are and choose the format they feel most comfortable with. Starting with online formats that are accessible at all times, through to personal consulting on site or virtually. The long-term goal in this case would be a central content hub for knowledge measures. In this hub, banks and financial institutions can collect the variety of offers and measures and thus reduce user barriers and fear as far as possible. In addition, the content hub offers the possibility to serve all internal as well as external channels in a uniform and efficient way and also ensures the transfer of knowledge across departmental boundaries.
People-centered consulting and marketing
When it comes to financial empowerment, it is important to think outside the box. It doesn't stop there when it comes to consulting and marketing.
One reason why customers still have reservations about financial empowerment could be that money and finance are highly emotional topics in Germany. Money forms the basis of existence for many people. At the same time, it is strongly associated with status, elitism and power. Accordingly, it's no wonder that people who don't feel they belong to these values, and have rather "modest capital" to show for it, avoid going to the bank or seeking advice. They do not feel entitled to do so. There is a kind of unspoken assessment limit, which sets the standard from which one is entitled to take the time of the banks and to be advised on financial investments. But this is not true. That's why it's important for banks to move away from their elitist positioning and approach their customers as more accessible service providers.
Here, established banks can learn a thing or two from the cooperative banks. Volks- und Raiffeisenbank, for example, communicate in very clear and simple language and thus serve the needs of their target group in an easily understandable way. Above all, they emphasize the values of security, regionality and long-term relationships, thus living up to their name "Volksbank.
In the end, the main thing is to deal empathetically with customers and their life and financial situations. Not giving them the feeling that they are less important with less capital and closing gaps in their knowledge with tact and sensitivity. To achieve this, it is important to train employees in the relevant banks. This also promotes customer relations in the long term!
Remaining competitive through financial empowerment
Helping customers to achieve financial self-determination is a win-win situation for both sides. Banks and financial institutions also benefit in terms of competitiveness. If they want to keep up with the up-and-coming neobanks in the long term, they must start now at the latest to offer substantial, well interlinked and, above all, easy-to-understand information and offers across all their channels. Only informed customers can make sovereign decisions that result in increased self-determination and autonomy, and thus in greater satisfaction. They can better classify products and offers and thus best assess which providers they would like to trust.
Finances are no more topic, which should be exclusively of interest for stockbrokers, investors and speculators. It is no longer just about profit. For some people it is about their security, about their freedom, about their existence. Banks have to help people who do not have a personal interest in financial investments to classify facts correctly, to reduce complexity, and to overcome fears. The big goal is: New Growth in the area of customer satisfaction and customer loyalty at eye level!