Digital banking: Breaking barriers to financial empowerment
Open Banking means much more transparency in financial management for individuals, because of the tools and apps that are now available. The world has moved on significantly from the days when your only view of an account balance was delivered on monthly paper statements or by checking in-branch or via an ATM screen.
Today, customers can check their funds and imminent payments 24x7 from a mobile app. They can split bills with friends, sweep spare change into saving pots, and even categorize payments to better understand where they spend their money.
Financial education is available for investing too. Fintechs have built platforms to simplify and demystify the investment process. Robo-advisors support decision-makers, especially those investing in relatively low rate, low risk scenarios, encouraging more individuals to take their first steps into growing personal funds.
Taking control with cashless payments
Another way to keep tighter control of income is to move from cash to digital payments, so that money can be properly managed within bank accounts.
In some large cities, notably London, the move by street performers to accept cashless payments had already started pre-COVID, with buskers using the iZettle reader so people could simply tap their payment cards or phones to give a donation.
Software updated by iZettle keeps the reader switched on and in Repeat Payments mode, making it as easy as possible to accept donations of the same (usually low) value each time.
Speaking at the launch of the iZettle contactless payments initiative in 2018, full time busker Charlotte Campbell said, “I believe if street performers like myself don’t adapt to the cashless society we are edging towards, we’re at risk of becoming a dying art.
“I’ve only trialled Repeat Payments for two weeks and it has already had a significant impact on the contributions I’ve received. More people than ever tap-to-donate whilst I sing, and often when one person does, another follows!”
Using cashless payment terminals to accept donations, buskers returned to cities post lockdown. With some entertainers making as much as 70% of their income from busking, it’s a welcome step forward that makes it safer to go back to work.
Moving forwards
There’s a whole range of techniques that banks and fintechs are employing with customers to help them make more of their money. These include prompts to pay bills, nudges to save towards special occasions, or help to pay down persistent debt.
Using data analytics, banks can understand much more about their customers, and the life stages they are at, and work with them to navigate their way through good times as well as bad.
It’s so important for banks to be able to give customers the tools they need to understand more about how they are spending, saving and investing, empowering them and giving them financial independence. When communities are financially empowered, they are able to thrive and I’m proud to play a small part in that in my work with Finastra.
Discover more in the Redefining Finance series
