Banking has gone undercover and it’s been a long time coming. We want our banks to do a lot for us, but it transpires that the less you can actually see your bank doing for you, the better.
So, it begs the question: why would banks suddenly decide to assume the Good Samaritan role after all this time? Sheer benevolence or is there something in it for them too?
Invisible PFM, as it’s known, is the banking relationship customers have always wanted but never thought possible; finances made easy and even, dare we say, pleasurable. Suddenly rather than receiving letters from the bank informing of overdraft charges after the event, customers are now alerted to potential charges with time to spare: “Hi Mary, you’re about to go overdrawn - why not move some money from your current account to cover it?” or, “You’ve almost spent your food allowance for this month. Here are some cheap restaurants in the area to help you save”.
How have banks gained this level of intelligence about our money management, to allow them offer us this kind of valuable insight? The financial institution is learning to listen, that’s how. And not a minute too soon.
Whether or not banks have put their ears to the ground and adopted this new system proactively in an attempt to provide more added value to the customer, or are simply playing catch up in a market that had been stagnant and in need of a significant overhaul, is irrelevant at this stage of the game – modern consumer behaviour is such that loyalty to your brand is non-existent and unless you offer them a solution that works, you’ll be side-lined. What is evident, however, is that the element of choice is no longer there; go one better than the rest or pay the price.
The focus has irreversibly shifted from product to consumer. Banks should avoid loan-pushing at all costs if they want to succeed. The real money is in tuning in to your customers - who incidentally, are very active in saying what they want and need- and act on their demands. In many sectors, this valuable information had a history of falling on deaf ears.
If you know that your customer has 4 children and Christmas is just around the corner, they are likely to be open to hearing your advice on how to plan ahead. If they have spent astronomical amounts on car repairs in the past year, they are no doubt already out searching for an upgrade. Banks’ products still get sold, but they have to want them. A change of tack.
Invisible PFM is synonymous with understanding, relevance and all the elements you need for a successful, long-term partnership as the customer's 'everyday bank'.
This is the match made in heaven, it just happens to be with your bank.