As home to numerous banks, investment funds, financial institutions and startups, Luxembourg is renowned for its expertise in international finance. So, it should come as no surprise that people living in Luxembourg are also skilled at managing their finances. But this should not discourage banks from finding ways to offer their customers something extra.

Most banking customers fly solo… but would still welcome support

Two out of three banking customers interviewed in the Luxembourg survey, confirm that they are managing their finances without assistance from their bank. For the other third, assistance from their bank with their finances is considered essential. So, it might seem like the majority do not need any extra help since they are already flying solo. However, when you take a closer look at the data, this assumption can be misleading. Four out of 10 customers would appreciate proactive help from their bank because they believe it would empower their decisions and help them to fly even higher.

Provide a safe nest

The survey reveals that Luxembourg banks need to focus more on data transparency and clear communication around data usage. Respondents’ main concerns around sharing personal data are lack of transparency on how their data will be used (20,6%) and fear that their bank may resell their data (26,8%). They also fear that banks will use personal data in an intrusive way (24%). Consequently, banks should carefully navigate the fine line between proactively advising their customers and too much meddling.

Nevertheless, 63,8% of banking customers in Luxembourg said they would be willing to share personal data in exchange for protection against fraudulent transactions.

Security is a key factor in further developing the already trust-filled relationship Luxembourg banks enjoy with their customers. 79,8% of respondents admitted that they would trust their bank even more if it addressed cybersecurity. Banks have nothing to lose by becoming a “safe nest” for their customers.

These tendencies are also in line with the trends see in the research globally. According to the 2019 Fjord Trends “trust and transparency will offer a competitive advantage to those who maintain it, opening up new opportunities to attach ‘trustability’ scores to all sources of data and information”.

Make them feel special

Is security enough? According to the study, banks should also make an effort to provide more relevant offerings to their customers because the majority would be willing to share personal data in exchange for benefits above and beyond security. Luxembourg customers would like services adapted to their needs (52,8%) such as targeted offers or customized messages. Services should also be personalized (47,8%) to anticipate individual needs, for example, helping customers to analyze their spending habits in order to save money.

How should banks leverage this customer trend? The key is to create hyper-relevant experiences. To do so, banks need to instantly recognize and understand their customers, their history and preferences. One way is to leverage all previously provided information, regardless of whether the customer speaks to an advisor in a branch or receives a recommendation online.

Fly towards new horizons

In today’s Open Banking era characterized by ever expanding eco-systems, personalization can go even further, moving beyond traditional financial advice and towards new services.

Two out of three respondents to the Market Pulse Survey in Luxembourg indicate an openness to allow banks to analyze their personal data in detail in order to proactively propose assistance with travel choices, buying a car and a house or even starting their own business. To seize this opportunity, banks should team up with eco-system partners and provide a seamless end-to-end experience. This would create new revenue streams, generated by a wider spectrum of services that match those of Fintechs and other competitors.

Be careful not to fall

The trends around trust and transparency observed in Luxembourg are not isolated.
Although banks dispose of vast amounts of data that can give wings to their customers and their business, they need to use it carefully. By focusing on becoming trusted partners, using data securely and only providing relevant and tailored advice and services, Luxembourg banks and their customers can fly higher and further together. The infographic summary of the results created by Accenture in collaboration with the Banking Scene is available here.