Mental health is a lifelong and complex concern that affects how people think, feel, and act. It also plays a crucial role in determining how individuals handle stress and make healthy choices. Financial wellness, or the lack thereof, is a significant factor impacting mental health. 

Fortunately, Fintech companies possess valuable solutions to boost financial wellness in the digital banking sector, addressing areas where banks and financial institutions may face limitations like IT infrastructure or technical expertise.

3 ways Fintechs can help banks to enhance customers’ financial wellness

According to mind.org, 77% of British residents reported being stressed about money, financial wellness is a serious issue that may lead to depression, anxiety, and a lack of financial freedom. In addition, a Money and Mental Health survey shows that mental health problems make it harder to earn, and manage money and spending.

In this respect, one of the roles of Fintech companies for financial institutions is to help ease the everyday stresses of dealing with finances, so that your customers can focus on other areas of life. Here are three ways that Fintechs can help reduce your customers’ financial stress and anxiety:

1. Help users to make smarter financial decisions

One of the most popular benefits of implementing data-driven technologies is that you can bring a rapid overview of your customers’ financial situation. Whether they’re seeking advice, making transactions, or monitoring their investments, Fintech solutions are known for their agility in addressing user requirements through your digital banking platform.

This saves your customers precious time and administrative efforts to let them focus on what matters most. This is the case (for example) of Personal Financial Management tools, which allow users to have instant access to their personal finances, account balances, financial transactions, spending habits, budgets, and savings. These solutions help users stay on top of their money and make smarter and more informed financial decisions.

Strands’ PFM solution, driven by Artificial Intelligence, Machine Learning, and pattern detection, means smarter money management for the customer, improved bank-user engagement, and a greater share of wallet for the bank. Using this solution means less frustrating waiting times and allows the customer to have a clearer financial picture.

2. Offer personal finance analysis and predictions

A revealing study by Accenture underscores the eagerness of banking customers to share their data when it leads to personalized experiences. An 83% of customers are willing to share their data with financial institutions in exchange for personalized services created to meet their specific needs. This statistic underscores the significant demand for personalized financial solutions and the trust customers place in data-driven insights to enhance their banking experiences. 

For instance, with solutions like Strands Engager, you can build stronger customer relationships by transforming each interaction into a guided and meaningful conversation and helping you boost engagement and cross-selling opportunities.

Engagement and loyalty: The top benefits of driving an effective Financial Wellness strategy

Financial wellness offers banks multiple advantages, but there are two main ones in terms of customer engagement and loyalty. These benefits are key to a bank’s success, particularly in moments marked by significant customer churn and the challenge of retaining users.

1. Channel adoption and engagement

Financial wellness programs serve as an educational bridge, helping customers better understand banking products and services at their disposal. The more customers understand how digital banking platforms can help them manage their money, the more open they are to learning and interacting with them.

This heightened understanding can lead to increased customer engagement rates. Customers are naturally more open to using products they genuinely understand and trust. Thus, by facilitating this understanding, banks can drive better customer engagement to their digital platforms.

2. Increase in customer loyalty

Loyalty is the cornerstone of a bank’s success. By offering digital financial education, banks signal a genuine commitment to their customers’ financial well-being. This commitment fosters trust and loyalty, paving the way for long-term customer retention.

A study conducted in 2021 by the Financial Health Network revealed a compelling statistic: 72% of customers who experienced improvements in their financial health due to their financial services provider’s efforts became more loyal to that provider. This demonstrates the powerful link between financial education and customer loyalty.

Final thoughts

Financial education empowers individuals to make informed financial decisions, resulting in improved customer financial health and the potential for new cross-selling opportunities for banks.

As we’ve seen in the article, to achieve this, specialized Fintech companies and solutions are key to assisting financial institutions in providing digital financial education and advice through data-driven insights. Through this collaboration, banks strategically build loyalty and promote the adoption of digital channels, which contributes to building a healthier customer base, both financially and mentally in consequence.

If you’re thinking of implementing a financial wellness strategy in your bank or financial institution, don’t hesitate to talk to one of our experts.