Turning financial well-being into a banking business model
Financial well-being is a fundamental principle for the world’s first behavioral bank, South Africa-based Discovery Bank. The bank is anchored in the Vitality platform, which uses financial incentives to help customers curate and sustain healthier lifestyles – integrating physical well-being into financial well-being. For example, Discovery’s offering – which EY teams have been involved in building – includes benefits from Vitality partners, such as 100% cashback on gym membership.
Along with offering customers rewards for responsible spending, healthy eating and exercising, the digital-only bank aims to help them understand and improve their financial behavior, unlocking greater long-term value in the process.
By setting out how people can benefit from being financially healthy, Discovery Bank is reimagining how a financial institution and its customers can mutually benefit from greater financial well-being.
It’s a lesson other banks need to consider carefully. And while there is no set rulebook for implementing more reactive, engaged banking solutions, the following steps can help banks deliver products and solutions that truly work for their customers and expand their operations:
- Redefine customer experience: Putting customers and their needs to the forefront of your thinking is critical to building solutions with staying power.
- Take a mobile-first view: From contactless banking to account access, customers expect product and service accessibility from portable devices, at a moment’s notice.
- Develop a data strategy: Building solutions means knowing what data you have, what data you need, what questions you need to ask of that data, and how to interpret the answers. Centralizing existing datasets is key.
- Select the right technology platforms: When building new services into operations with extensive legacy processes and assets, and as subject to regulatory scrutiny as banking, taking your time choosing which platforms to use and how to use them is essential.
To remain relevant amid a competitive culture that is promoting new ways of managing money, all banks need to refocus on helping their customers meet their personal needs.
It’s no longer enough to simply offer accounts, savings or loans. If we want people to be more broadly served financially, then we need to engage them in a digital dialogue. What’s more, banks need to be more proactive in helping their customers achieve lasting financial well-being so that they can secure long-term loyalty in this age of the empowered consumer.
This article was co-authored by EY Partner, Jay Pather, Consulting Financial Services, Africa, India and Middle East.