Financial empowerment is what banking consumers are seeking, not just digital applications.

In the rapidly evolving world of finance, three crucial steps are being identified as key to financial empowerment: Knowledge, Control, and Freedom.

Knowledge is the foundation, providing clarity, tools, and understanding to work towards financial goals. Many consumers have found banking difficult to navigate due to complex terms and conditions, leading them to avoid interacting with their banks. However, digital banks are excelling in offering clear, helpful, and responsive apps for day-to-day interactions.

Finastra, a leading company in digital banking solutions, conducted an ethnographic study on banking relationships and found that financial empowerment is pivotal to productive customer relationships. Their research reveals that people want banking personalized to their needs, within their limits, and on their timing.

Taking control of finances is the next stage, allowing consumers to see the effects of their actions. Well-designed digital tools, such as those offered by Finastra through solutions like Fusion Essence Cloud and Fusion Phoenix, put control in the hands of the customer. These tools allow them to set daily spending limits, make changes quickly, and create and modify different categories of income and expenditure in real time.

The final step is Financial Freedom, a state where customers can make long-term plans and automate actions, reducing guilt-free spending. This freedom is achieved when customers can take care of their finances themselves, with their bank providing support in the background. However, incumbent banks often require authorization for changes, causing delays and a feeling of distance between consumers and their bank.

To address this, banks like DBS Bank and United Overseas Bank (UOB) in Singapore are heavily investing in digital transformation and collaborating with fintech firms. DBS is notable for its digital asset innovations and regulatory collaboration, while UOB has developed the C360 platform for unified customer data and improved service.

Incumbent banks are taking action to reverse the trend of being relegated to a background role as safe repositories for customers' cash. They are partnering with fintechs and investing heavily in digital transformation to offer customers enhanced personalization, control, and freedom in managing their finances.

In conclusion, the banks that provide the knowledge, control, and freedom customers are looking for will be the winners, regardless of their generation. By embracing digital transformation and focusing on personalized, easy-to-use services, banks can empower their customers and build strong, productive relationships.

Financial empowerment is what banking consumers are seeking, not just digital applications.