Legacy Never Lasts: Inspiring Innovation in Fintech

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Jun 18, 2024

In the last article in our series on the unfulfilled promise of behavioral science in fintech, we explored a few of the many reasons we still haven’t seen the results we were hoping for from applying behavioral science to money-related apps.

The good news is that, even though behaviorally informed features might not be everywhere yet (or even in any of the five banking or money-related apps I currently have on my phone), there are individuals and organizations actively working on this. This sometimes takes the form of applied research and innovation firms such as ours, working directly with partners on bespoke ways of bridging the gap between a user's financial well-being goals, their socioeconomic position, and their underlying psychological barriers and drivers. 

Other companies take more of a platform approach, offering a productized solution integrated into an already existing product—think of your typical online banking app that has various new features added to it. There are actually quite a few of these, such as MoneyThor with a strong presence in Asia, which focuses on driving personalization and engagement, or Doconomy, a European platform creating a positive impact through improving climate literacy and introducing sustainable banking offerings. (Fun fact: After publishing the previous article, someone from Doconomy reached out to me on LinkedIn, which is how I came to find out about them!) 

So if there are already companies working on this, how come these offerings aren’t more ubiquitous? 

Financial institutions are still operating legacy tech stacks

Research from the Digital Banking Report in 2018 found that 94% of banking providers couldn’t personalize marketing or CX, struggling to tailor their services and communications to the individual needs and behaviors of their customers. For example, personalization in banking apps could involve sending targeted financial advice based on a customer's spending patterns, offering customized product recommendations, or providing timely reminders for savings goals. Although the report is from six years ago, and recent data shows that banks have made some progress in bringing more customized experiences to customers since then, the reality is that many of these organizations continue to struggle due to the many legacy systems still in place. Fast forward to 2022, and only about 14% of these institutions were able to offer contextually relevant experiences.

About the Author

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Dan Pilat

Dan is a Co-Founder and Managing Director at The Decision Lab. He is a bestselling author of Intention - a book he wrote with Wiley on the mindful application of behavioral science in organizations. Dan has a background in organizational decision making, with a BComm in Decision & Information Systems from McGill University. He has worked on enterprise-level behavioral architecture at TD Securities and BMO Capital Markets, where he advised management on the implementation of systems processing billions of dollars per week. Driven by an appetite for the latest in technology, Dan created a course on business intelligence and lectured at McGill University, and has applied behavioral science to topics such as augmented and virtual reality.

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I was blown away with their application and translation of behavioral science into practice. They took a very complex ecosystem and created a series of interventions using an innovative mix of the latest research and creative client co-creation. I was so impressed at the final product they created, which was hugely comprehensive despite the large scope of the client being of the world's most far-reaching and best known consumer brands. I'm excited to see what we can create together in the future.

Heather McKee

BEHAVIORAL SCIENTIST

GLOBAL COFFEEHOUSE CHAIN PROJECT

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