Future of Digital Banking: How NeoBanks can influence Behaviors and Personal Finances through Innovative User-Focused Products

For over three million years, the relentless march of technology has reshaped our world, propelling us into an era of unprecedented progress and transformation. Across diverse sectors, technology has been a driving force, streamlining complex processes, optimizing efficiency, and revolutionizing the way we interact and function in the digital age. Among these sectors, finance stands […]

For over three million years, the relentless march of technology has reshaped our world, propelling us into an era of unprecedented progress and transformation. Across diverse sectors, technology has been a driving force, streamlining complex processes, optimizing efficiency, and revolutionizing the way we interact and function in the digital age. Among these sectors, finance stands out as a major beneficiary, with Fintech at the forefront. This surge in financial technology has not only enhanced the customer experience but has also fueled a remarkable adoption in FinTech app usage over the last couple of years.

The financial landscape in Nigeria has undergone a profound transformation owning 32% of Africa’s Fintech market with 217 companies, a substantial leap from 144 in 2021, signifying a dynamic and evolving environment that is ripe for innovation.

As technology advances, so do the expectations of modern bank users. The demand for a higher level of customer-centricity is paramount, driven by the desire for personalized and efficient financial services. However, a report from the KPMG Nigeria Banking Industry Customer Experience Survey reveals a growing disconnect between customer expectations and the services provided by traditional banks. According to the survey, 49% of customers believe their primary bank truly understands their needs and preferences, while only 41% agree that their bank anticipates their needs and offers relevant solutions. This disparity underscores the urgency for innovation in the financial sector and underscores the relevance of neo banks in bridging this gap.

Nnamdi Ehirihim, Head of Strategy and Finance at gomoney Inc, one of Nigeria’s most innovative neo banks, emphasizes the pivotal role of neo banks in exceeding customer expectations. He said, “some neo banks are surpassing expectations, and gomoney is a perfect case study. At gomoney, we are focused on building customer-centric innovations that significantly improve the quality of life of our users. This has always guided how we approach innovating new product features. Some identified favorites by our users include the transaction enrichment tool which enables users track and monitor transactions, the goStash feature; a saving resource for essential needs like rent, school fees or a gadget. Then there’s the Split Bill feature allowing friends and families to share bills amongst themselves when on an outing for example. A recent update to the Split Bill is how users can now see their debtors and creditors. These features not only help our users navigate their day-to-day financial dealings conveniently, even in unpredictable economic times, but also nudge them to make smart decisions towards achieving long-term money goals. It’s all about simplified banking and we’re all for that.”

A more intent look at such insights points to how more neo-banks should consider incorporating three essential components into their offerings, to increase their chances of achieving product-market fit. These components can simply be categorized as financial insight tools, expense tools, and savings tools. Insight tools compile and analyze users’ past activities, highlighting transaction patterns and expenditure areas. On the other hand, expense tools consider the customers’ routines and interests, offering widgets to help manage expenses. At the core are the savings tools, which consider users’ diverse financial objectives. Like gomoney, digital banks can simplify the process of categorizing funds for specific purposes, whether it be a vacation, a new home, an emergency fund, or an investment opportunity.

With tools such as this, digital banks can foster healthy financial behaviors and habits in their users. It’s evident that gomoney is at the forefront of this, helping young people gain control over their finances and make sound financial decisions. ‘Hopefully, there will be more competition in the coming times because eventually, the customer is the winner and that’s the hallmark of success for any product.’ Nnamdi concluded.