For most customers, navigating their financial lives takes guidance, patience, and a healthy dose of self educating. Understanding 401ks, college savings plans such as 529s an ways the can leverage tax breaks takes a considerable amount of time and effort to understand.
As a financial institution, you’re already an expert on all of these topics. Additionally, over the past ten years, there has been an explosion of content marketing, or promotional material whose primary function is to provide valuable information, with an opportunity to pitch your product or service within that information.
Furthermore, financial institutions are now leveraging FinTech partnerships and AI more than ever before to help provide a customized experience to customers and their unique financial pictures.
Consider the ways you can combine these three strengths: your expertise in the financial arena, your content marketing strategy and your ability to use AI and predictive analytics to sell your products and services in a way that is customized and shows specific, quantifiable financial opportunities your customers can take advantage of.
Retirement can be intimidating, especially amid COVID-19 and major changes in financial trajectories. For younger workers, their retirement will likely have time to recover and grow. For older individuals near retirement, their plans may need to change and they may need to push their retirement dates back in order to achieve their goals.
In either scenario, individuals are looking for clarity around their financial lives: what their retirement might look like, how their income and expenses will play out, how their lifestyle might have to change, and what specific actions they need to take in the meantime.
With predictive modeling, your financial institution can help take the mystery out of this process and provide specific action steps including the percentage of their paycheck they devote to retirement, their targeted date, and their asset mix. By providing this informational resource, you create an opportunity for individuals to potentially roll over to an account with your organization, or bundle their accounts in a way that is advantageous to your organization.
Think about ways you can help your customers wrangle, organize understand and act on their personal budgets.
- Wrangle and organize. Most customers spend and allocate their paycheck through a combination of retirement accounts (automatic withdrawals), credit cards, payments from their bank account and cash withdrawals. Find ways to develop calculators to help them aggregate all of these different expenditures, categorize their spending and automate the process month over month. If this is too much, think about ways your organization can partner with a FinTech organization who provides this service.
- Understand and act. Help your customers carve out opportunities where they can save, and think about how those opportunities can align with the goals of your organization. Do they have savings account funds that could be better utilized in a CD? Do their credit cards maximize the amount of rewards they receive? Use their information to find gaps and inefficiencies, and then provide chances to act. Even if opportunities for change don’t directly benefit your financial institution, you’ll create a chance to build trust with your customers and prove your value to them.
Mortgages and Other Loans
Purchasing a home is a major lifestyle change, and also a major financial adjustment. Understanding mortgage payments, insurance, taxes, utilities and the unexpected costs of owning a home take guidance, and financial institutions and well-positioned to provide this guidance. Beyond approving a potential purchaser for a loan, think about how your organization can help take the mystery out of home-buying.
For first-time home buyers, think about the way you can help them predict and add up their different costs. Show them what closing costs and a down payment might look like, the advantages/disadvantages of different down payment amounts, and how their budgets might need to change in the meantime to help them achieve their financial goals.
For new purchasers, help them understand what they can expect to receive for their home, how they might transfer to a new mortgage and how they can leverage tax credits to help get the most out of purchasing a new home.