3 reasons Neobanks will add scalable human financial advice to drive growth

Digital convenience doesn’t drive differentiation and loyalty.

As neobanks have exploded in popularity in recent years and the technology infrastructure to support new entrants has only gotten better, it’s getting increasingly difficult to stand out.

More than that, though, neobanks are struggling to engage and activate accounts. The onboarding process has become so efficient, that customer acquisition is relatively easy and low cost. Getting users to convert and fund their new accounts, however, is a bigger challenge.

For both neobanks, as well as traditional banks whose branch traffic is disappearing, there is a big opportunity in pro-actively delivering advice. J.D. Power’s recent study on advice at retail banks states:

“Targeted, personalized financial advice drives gains in customer satisfaction: Overall customer satisfaction increases 229 points (on a 1,000-point scale) when customers are offered advice/guidance that completely meets their needs.”

A great financial adviser, integrated into an amazing digital experience that expertly blends technology with a human touch, can drive growth for neobanks by:

1. Building trust
2. Increasing engagement
3. Delivering empathy

Advice Builds Trust

Customers (who are people just like us!) want a human connection. Particularly in the face of the relative isolation that the pandemic has wrought, we want to know that someone trustworthy will help advise and advocate for us. A financial adviser that understands a customer’s situation and sticks with them naturally builds trust over time. Personal finance is a delicate topic and when you open up to someone, like a fiduciary Certified Financial Planner (CFP®) who is uniquely qualified to assess and advise, trust is rapidly established.

Since all banks can effectively offer the same automated services, scalable human financial advice is a powerful way to differentiate.

So how can human financial advice be scalable? By delivering advice asynchronously and relying on dedicated assistants who support both the adviser and client, there are dramatic efficiencies that can be achieved.

Additionally, in a recent randomized controlled trial on the Moneymap platform with Dan Ariely’s Center for Advanced Hindsight at Duke, Moneymap found that people who received asynchronous advice made more progress towards their financial goals than people who talked with their financial adviser (more on this in a later article).

Advice Increases Customer Engagement

Engagement is always high at sign up, but how do neobanks continue to stay top of mind over the course of the year and then year-after-year? Advice creates a situation where not only can a neobank deliver amazing guidance that delights users, but it also creates opportunities to partner on the implementation of that advice. Once you’ve helped implement the advice, now neobanks have permission to follow up and assess further opportunities to deliver value.

By communicating with customers through their preferred channels, whether that’s text, email, in-app messaging or asynchronous video chat, neobanks can dramatically improve customer engagement and stickiness. By creating a great online customer experience and delivering key insights to help customers achieve their top financial goals, neobanks earn the right to go back to customers and re-engage them around any number of topics.

Advice Is the Perfect Intervention for Delivering Empathy

Bots cannot deliver empathy. They may be able to simulate it someday, but we’re not there yet.

Neobanks can move beyond their automated services and limited human support to profitably and pro-actively engage their customers, while creating space to understand their challenges. A good financial adviser is emotionally intelligent and understands how financial goals are deeply personal for their clients. By attuning themselves to the client’s situation, they can effectively co-design a financial action plan that helps the client feel heard and understood.