In our two previous blogs (How can banks leverage behavioural science to mitigate the financial stress caused by the cost-of-living crisis, Why the time to address ‘financial wellbeing’ is now) we have argued for the banking industry’s natural role in combating financial stress and why the need to invest in this area is today. In this blog, let’s explore what concrete actions banks can take to boost their customers’ ability to take control over their financial wellbeing.

The banking industry is not known for being the most inclusive and easy-to-enter environment, and today’s user experiences are often not delivering on customer expectations. The financial lingo and formal visual cues are fueling the perception of complexity.

By leveraging behavioural science, banking services can be more consciously designed to boost customers’ actual and perceived ability to take action towards improved financial wellbeing. In essence, it all comes down to lowering existing barriers. 

Practical ways to build customer ability

• Start small. The most powerful way to build self-efficacy is through performance accomplishment, i.e. gathering customers’ own experience of succeeding with a behaviour or a goal. To build customers’ confidence, each small milestone counts. For banks, this involves showing how everyday behaviours will add up to something big and worthwhile. For example by sharing how small changes in spending or saving habits can have large positive effects over time.
• Celebrate personal success. The right kind of feedback at the right time is powerful. Getting a positive reward following a behaviour is the best way to strengthen the behaviour and turn it into a habit. Helping to change the perception of what they can achieve becomes an important piece of evidence and will shape the financial identity of the consumer.
• Inspire, don’t prescribe. Banks should aim for realistic persuasion, but it is harder than we think to get it right. A misalignment in emotional desires risks making this effort counterproductive and instead resulting in increased financial stress. Banks should inspire customers in ways that are feasible for the unique individual, both from a practical and an emotional perspective. It’s also important to remember to keep recommendations at the level of inspiration and not a prescription.
• Make finances social. Social cues in banking products help customers identify with a behaviour. Sharing the financial habits of relatable customers and role models is one option. Another is to add features that allow customers to act together with friends and family. Both mentioned features contribute to elevated motivation and demonstrate ability to take action.
• Nurture positive emotions. While it is impossible for banks to fully control the emotional states of their customers, it is still important to ensure that their products have a positive emotional impact. By keeping communication simple and encouraging, banks can remove the risk of confusion or feelings of exclusion. A non-judgmental tone and a focus on opportunities to take better actions going forward are more impactful than the focus on past behaviours that have gone wrong.

To conclude, there are many small and ongoing features that add up to an experience that boosts customer ability at its core. While they all can be perceived as given at first, the true challenge is finding the balance and timing to get them right. In our products at Dreams Technology, we are constantly fine-tuning each element to maximise impact. With our B2C experience, over 6 years of customer feedback and +1000 iterations, we are still learning. We are experts in this area and our products are focused on boosting positive behaviour, but there is always room for improvement as people are not static and the context they are part of is constantly evolving.