by Aleksandar Jeremic, Co-Founder and Managing Director of fino

"German banks must not rest on their feet if they want to still be relevant in five years' time." This was recently said by Bundesbank board member Burkhard Balz in the context of growing competition from abroad. They are challenged to integrate further attractive online services into their portfolios as well as to proactively provide tailored offers. Banks can do this with digital receipts and flexible data analysis.

Digital receipts are more than just an electronic form of cumbersome expense documents. They contain data, for example, on the issuer of the document, the time of purchase, the items purchased and their prices including sales tax, and the method of payment. They provide information about electronic payments as well as cash payments, which were previously almost impossible to trace. Since their information is available and recognized digitally, artificial intelligence can process it immediately. This, in turn, offers great potential that banks can utilize - now and comprehensively with the help of innovative FinTechs.

More than just a money service provider

In concrete terms, the targeted use of data enables you to expand your role as money service providers. For example, you can offer customers and prospects services that receive and automatically organize receipts. Algorithms take over the classification, secure storage and easy retrieval and export of certain receipts, for example in the event of a warranty or exchange, or exporting for expense reports or tax returns. By enabling customers to link their bank accounts to the application via a PSD2 interface, they can assign receipts to transactions. Combined with other services such as account analysis, customers receive a complete financial overview of all their purchases and expenditures, as well as the opportunity to track their consumption behavior seamlessly and transparently.

Banks benefit from up-to-date overviews that reflect the life situation of the respective customer more accurately than ever. In addition, banks automatically receive recommendations for action that enable them to make personalized offers, for example for suitable financial products or services, at the right time and in the right way. Ensuring liquidity until the end of the month, achieving specific savings targets or implementing a complete financial plan? All this is possible. At the same time, banks can use the information for risk assessments of customers and offer installment loans. Additional services, such as insurance or warranty extensions based on the receipt, are also conceivable. If these are easy to use, for example with a click or touch in an app, banks are already making their mark in onboarding.

Individual business models with future potential

These and other applications can be implemented easily and flexibly. Modular solutions allow individual combinations. In addition, different ways of providing information, for example via a web-based dashboard, in the bank application or as PDF files, enable implementation in a wide variety of infrastructures. This gives banks, regardless of size, the ability to build business models that increase cross-selling and upselling, as well as customer interactions that improve the customer experience and positively differentiate themselves from the competition.

In this way, financial institutions can succeed in securing the relevance that Burkhard Balz mentioned. After all, the next generations of customers expect such services to make their daily lives easier. They already use them as a matter of course in a wide variety of areas with Apple, Amazon and Google. However, banks do not have to be inferior to these giants in terms of their core competencies if they cooperate with FinTechs and play to their strengths in a targeted manner.

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