Banks step up financial management support as Brits seek help to navigate the cost-of-living crisis
New research by Tink reveals that an estimated 42% of banking executives believe they have a responsibility to help customers through the cost-of-living crisis. But just over a quarter of Brits surveyed currently feel their bank is providing them with tailored support. These findings reveal an opportunity for banks to enhance consumer support by continuing to develop, and raise awareness of, data-driven financial services.
New Tink research shows that an estimated 42% of banking executives believe they have a responsibility to help customers through the cost-of-living crisis, and 56% agree there is commercial rationale for doing so.
But just over a quarter (27%) of Brits surveyed currently feel their bank is providing them with tailored support.
Findings reveal an opportunity for banks to enhance consumer support by continuing to develop, and raise awareness of, data-driven financial services.
As UK consumers grapple with the rising cost of bills and goods, financial institutions are ramping up their data-driven financial management support. We recently asked both consumers and banking executives to share their thoughts on the responsibility banks have to support people through the cost-of-living crisis.
Clear demand for more tailored financial support
Based on a survey of over 2,000 UK consumers and 113 senior retail banking executives, the research highlights awareness and appetite for financial management tools is growing as consumers look to banks for tailored support.
Here is a quick snapshot of some of the key findings from our research:
An estimated 42% ofbanking executives believe they have a responsibility to help customers better manage their finances during the cost-of-living crisis
Over half (56%) of the banking executives surveyed agree there is a commercial rationale for helping people better manage their finances during the cost-of-living crisis
Encouragingly, around half of consumers surveyed (49%) reveal that they trust their bank more than any other financial services provider
However, just over a quarter (27%) of Brits surveyed currently feel their bank is providing them with tailored support
37% of consumers would like their bank to do more to help them manage their finances
47% of banking executives agree that fintech partnerships are helping them offer new tools to better support customers during the cost-of-living crisis
The commercial rationale for banks
Beyond being the ‘good’ thing to do, banks also recognise the business benefit in supporting their customers and, as shown in the results above, there is commercial rationale for helping customers better manage their finances. Our research shows that 42% of banking executives say offering data-driven services reduces customer churn, 42% believe it drives retention and loyalty, while 36% say it lowers customer acquisition costs.
Appetite for financial management tools growing
When asked what specific tools consumers are aware of and would like to use, perhaps unsurprisingly it was budgeting tools to help navigate the rising cost of living that topped the wish list:
Budget management tools (e.g. setting up and managing budgets to limit your spending) - 31%
Savings management tools (e.g. setting up and managing saving pots) - 30%
Spending categorisation tools (e.g. categorising spending into groups) - 28%
What banks can do
Despite lingering hesitancy amongst some banks, the majority are on the front foot and seizing the opportunity to develop and invest in these services. Of those surveyed, 62% are currently working on or would like to be able to offer budget management tools to customers, with a similar number (63%) also working on or keen to add transaction categorisation.
The forward-looking banks currently offering these services are already reaping the benefits. Half (50%) surveyed reveal data-driven financial services have delivered commercial benefits for their business, while another 50% also say it has helped them improve customer experience in particular. Almost half (47%) of the respondents agree that data-driven financial services have helped them better support their customers during the cost-of-living crisis.
Tasha Chouhan, UK & IE Banking Director at Tink, commented on the findings: “As UK consumers brace themselves for ongoing financial difficulty, it’s encouraging to see banks recognise both the responsibility and opportunity in offering data-driven financial services to help consumers manage their finances during this challenging economic time.
“To pick up the pace, financial institutions should continue to invest in building these services, alongside raising consumer awareness of the tools already on offer. Partnerships with fintechs specialising in money management tools are one way institutions can bring data-driven products to market at scale, taking the friction out of integrating them into their core offering.”
With Tink’s consumer engagement and financial coaching offering, financial institutions can provide their customers with more value during their banking experience, by transforming transactional data into innovative features.
These engaging tools help financial institutions create better relationships with their customers by encouraging customers to better understand and improve their spending habits through saving goals, categorisation, budgeting and insights. With Tink’s support, financial institutions are able to coach their customers towards better financial health. This can lead to increased engagement and win loyalty from both existing and new customers.
Interested in learning more about our products and how they can help power your digital banking services? Get in touch.
About the research
Consumer research was conducted by Censuswide on behalf of Tink in May 2023, amongst 2,007 nationally representative UK adults.
Banking executive research was conducted by Censuswide on behalf of Tink in May 2023 amongst 113 retail banking executives working at head offices. All executives surveyed are decision makers who are involved in the strategic direction of the business.
__
Case studies, comparisons, statistics, research and recommendations are provided “AS IS” and intended for informational purposes only and should not be relied upon for operational, marketing, legal, technical, tax, financial or other advice. We neither make any warranty or representation as to the completeness or accuracy of the information within this document, nor assume any liability or responsibility that may result from reliance on such information. The Information contained herein is not intended as investment or legal advice, and readers are encouraged to seek the advice of a competent professional where such advice is required.
More in Tink news
Splitwise and Tink partner to make paying back friends and family easier than ever
Splitwise, a popular app for sharing bills and expenses, and Tink have partnered to bring Pay by Bank to Splitwise users. This enables millions of Splitwise users to initiate direct payments to friends and family from within the Splitwise app.
Jennifer Thunander – delivering the goods
How does Tink make sure that its technical integration is successful? That’s where delivery teams, overseen by people like Jennifer, come in. Here she tells us about her role and ensuring that Pay by Bank journeys are as smooth as possible.
Deutsche Bahn and Tink partner for direct debit setups
Deutsche Bahn has teamed up with Tink for Account Check - enabling instant, easy and secure account onboarding. DB Connect, part of the Deutsche Bahn Group, runs some of Germany’s largest modern mobility sharing services including ‘Flinkster’, Germany’s largest car sharing network and ‘Call a Bike’, one of the biggest bike sharing systems in the country.
Get started with Tink
Contact our team to learn more about what we can help you build – or create an account to get started right away.
