Creating better outcomes through proactive finance

Picture this — a customer opens your mobile banking app and is greeted by a surprise. Not only can they see a full list of financial products they’re pre-approved for, they can also see just how those products impact their overall financial health.

Maybe this person is a renter but sees they’re pre-approved for a mortgage with a monthly payment amount that’s on par with rent. This gets the customer thinking — maybe now is the time to buy a home.

Or perhaps another customer has been struggling to juggle multiple high-interest rate credit cards and is relieved to see an offer for a personal loan consolidation. Yet another has been desperately seeking a way to lower their monthly payments, but refinancing their vehicle never seemed like an option — until the app presented a golden opportunity.

These engaging and eye-opening experiences empower your customers to make quicker, more confident decisions to improve their finances. Your customers realize this information isn’t the usual one-size-fits-all offer they’ve seen in the past. They’re intrigued, interested in learning more, and engaged. Why? They feel seen. You’ve personalized a typically impersonal experience with tangible next steps to consolidate debt, buy a home, or save on monthly bills — to make a real difference in their lives.

I’m referring to a visionary philosophy we call proactive finance. Proactive finance gives your customers a seamless way to understand what their current financial situation looks like, matches them with the right offer, and lets them know why it makes sense. Through data and technology, financial institutions can position themselves to regularly approach and meet customers where they are, with definitive next steps. By flipping the traditional reactive experience of serving customers only when they ask for it, we can build closer, stronger financial relationships.

Financing that fits the Generation Z borrower

The “fit for you” experience isn’t new in the digital space — tech behemoths like Netflix, Amazon, and TikTok have pioneered this strategy, elevating engagement by proactively offering content users are interested in. By now, this bespoke experience is something your customers have come to expect.

What we can learn from TikTok

I recently read that TikTok is quite possibly the greatest engagement tool ever made for Generation Z (born between 1997 and 2012). I believe there’s a lot our industry can learn from a platform that has completely encapsulated an entire generation, with an astronomical 689 million global active users, mostly under the age of 30.

TikTok offers individualized content based on what users have watched in the past to predict what they want to see in the future. And it’s working.

TikTok focuses on:

• Personalized and curated, bite-sized content
• Tools that are simple to use and understand
• Instant gratification

Because Generation Z grew up in the digital age, they have high expectations of the brands and services they trust. A survey by JP Morgan Chase also revealed that 79 percent of Generation Z consumers want more personalized offers and information from their banks to help them achieve their financial goals and save more.

These savvy customers are the future of finance and want the flexibility to manage their finances digitally in the way they complete most other tasks. They also crave the resources and education to help them make better decisions, and ultimately, improve their financial lives.

The hub for proactive finance

In order to make proactive finance a reality, we envision a new way of engaging with financial products. One manifestation of this is a concept we’re calling the homeownership center. When built, this would be a digital hub for customers to confidently act upon the offers they qualify for through easy-to-click next steps.

A customer example of how this hub works

In this example, a bank proactively lets their customer know via email that their house value has appreciated, and as a result, how much equity they have.

When they opt to learn more, they’re taken to a dynamic homeownership center that shows important information about their home and mortgage. This information uses existing data to proactively suggest solutions that may help them:

• Obtain a lower interest rate
• Get cash out from their home
• Start the process of buying a new home

This consumer happens to be interested in getting cash out for renovations and is shown several different options with additional information on how much it costs and how quickly they’ll get the funds.

The consumer opts for a cash-out refinance, and because the bank already knows about their home and current mortgage, they can accelerate the consumer’s path to refinance.

Proactive finance and the value for the customer

Proactive finance means going beyond just showing consumers tailored solutions. Instead, it offers an intuitive user interface that helps turn an ordinarily cumbersome process, like a refinance, into a streamlined experience that can be completed in just a few taps.

In this example, the consumer can review and sign a loan estimate and kick off the appraisal process in a few clicks. It also means they didn’t have to upload proof of income because, with their consent and Blend’s help, their bank was able to pull income data automatically.

When the appraisal is complete and the closing documents have been prepared, the consumer is invited back into the Blend hub. Here, they can:

• Review final disclosures
• Set up and complete an electronic closing with a notary
• Get the cash for their renovations with just a few more taps

We’re also pioneering additional scenarios in which customers can “tap to accept” new recommendations or resources to further their education about a specific product. They’ll learn why it may be beneficial for their unique situation. Building this type of experience is the future, and we’re excited to build it together, with financial services firms like yours.

Supporting financial stability and wellness for customers and generations to come

As we look to provide fantastic service to a generation of digital natives — and yes, to the many digital converts outside of Generation Z — we are aiming to provide a new level of transparency to financial interactions.

We also want financial service firms to become the center of their customers’ financial lives, offering strategies to achieve long-term stability and value. Embracing proactive finance is how we get there.

It’s a movement to transcend the transactional reality of most banking experiences today. But we can’t do it alone. If you’re ready to build something better, we’re ready to partner with you. Together, we can create a banking platform defined by the personal, powered by the proactive, and built for a lifetime of exceptional service.

• Listen to Nima speak more about proactive finance on an insightful American Banker podcast