Rewarding money management features with aspects of behavioral banking

Millennials today could really use some money management skills and the best way to do that is offering rewards. The app could have an in built money manager which would offer customized rewards based on the customer’s preferences. You get rewards for reaching certain savings milestones and the app helps you reach them. It’s like a game.

This can even be inculcated with behavioral banking to learn about the customer through their transaction history or by surveys, like one of those preference selection windows on music apps, nowadays. Payment apps already offer discounts, gifts and what-not. So why not turn it into a game? There could be levels, upgrades, gifts and rewards! It’s fun and you’d be doing them and the future of the nation a service. :v :video_game:

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@shubhankar_sen - Yes.

All of this will be a cyclical process.

User Spends - Generate transaction behavior & Spend profile.

The Savings can be two-pronged

1.Reduce the average spends on existing spend category by offers/alliances ( Savings are as good as earnings)
2. Multiplying the already existing savings (Savings milestones) - Here is where a digital wealth manager can be of immense assistance, based on an individual’s risk appetite. We can have multiple investment buckets. Earning money + Trust is also important, hence a mechanism that will ensure that the individual understands the nuances before committing to the financial plan is important.

Gamification of the above with references to how other users have benefited (anonymous population metrics) will definitely give a much-needed impetus and could set a benchmark for the Industry.

And before we know it, the above will give us some great indicators to arrive at an individual’s financial score - Rewards of prudent behavior can also impact the score.

Looking forwards to see what features Jupiter has thought of :slight_smile:

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This is really very well put and informative. I feel like a just learned a bunch of stuff without really being taught. So this is what kinaesthetic learning feels like. Huh! :grin:

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How about using an inbuilt digital assistant that can help in planning the spending every month! Again follows from the spending behavior.

The key, however, would be to make Jupiter as a central medium of spends or a mechanism to track all other spends through Jupiter app (AA maybe / SMS access)

The assistant can then nudge us based on behavior - Mainly to spend wisely (spend optimizers through commerce alliances) ;

The cases in which spend targets are achieved with say a significant margin, the respective surplus can be recommended to be invested in a medium to high return instrument e.g. SIP

This may create a win-win scenario for all stakeholders involved.

Every month/quarter, a score and statement can be shared on not only how much a person has saved, but by how much that savings have grown and multiplied :slight_smile:

Sharing the link to the 3D customer assistant which can double up as the respective customer’s Finance buddy!

Link

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Hey Krishnan, What would you learn from this score about your personal finances?

Hi @goldi , The score may indicate prudent behavior and the intent to be diligent. It will move closer to the concept of you are your credit score based on your behavior and not a random rating based on select factors.

Not sure if this is true @shubhankar_sen.

But really love this idea. As a user I save, get rewarded for it, and saving money is also addicting in itself. So I save more and get more rewards / better rewards for the same.

One thing which I want to pick your brain at is that why will an app reward you for saving more - how does the unit economics align here.

@Krishnan would love to hear your thoughts here as well.

Hi, @sahil-sorathiya , initial thoughts,

  • Reward for a behavior e.g. savings need not necessarily be in terms of cashback. It could be access to a financial product e.g. For consumers who are not eligible for a CC or a line of credit instrument, the bank can extend the CC or a credit product against a specific savings limit. e.g. Credit limit up to 80% of the balance.

  • Also, for an app, it could be more lucrative if its customers provide the app, full freedom to save the way the APP deems fit, this will increase margins + rewards. Refer thread on, The Reckoning: Why we need our bank to help us save better, now more than ever

  • Savings can also be looked at from the point of view of saved penalties, and the ability to earn something through good behavior. e.g. Can you incentivize a customer to pay their CC bill 10 days in advance for a reward, and that reward accumulates, while the company makes more than the reward + potential penalties by leveraging the float.

The above will be based on behavioral patterns, a live study of select customer segments could throw some fascinating results on behavior. Happy to pick this up as a conversation!

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