A personal trainer for your finances

As anyone who has ever made a New Year’s resolution knows, willpower and good intentions only go so far. Whether you’re trying to get fit or stop drinking, sometimes a gentle nudge or a wake-up call can help you stay on track.

This can apply to managing your finances too. Most people know that a disciplined approach is beneficial in the long run, but it’s all too easy to overspend and put off making provisions for the future.

It’s an area where banks can increasingly help. Customers can already ask them to put technology at their service to help them make informed decisions about their money. Want to know how much you spend on coffee each week, for example? No problem. You can set alerts through your mobile banking app.

Some people find it motivates them to save money when they visualise a specific goal and track progress towards it. Technology can help you do just that by earmarking a special pot inside your savings account for a holiday or a wedding. And one of HSBC’s apps offers a ‘balance after bills’ feature that calculates how much you have left to spend after regular outgoings are taken into account.

All of these tools put information in customers’ hands and can help them manage their money thoughtfully – saving more and focusing their spending on the things they really care about.

HSBC customers in many markets will soon be able to go one step further. They could decide whether they want our programs to analyse data automatically on their behalf, drawing on the power of machine learning, artificial intelligence (AI) and analytics, to make proactive suggestions based on these findings.

Our programs could scan what’s happening with their money, spot patterns and significant events – such as when a large payment comes in or a big direct debit is due to go out. Customers could then request to be notified if there are any unexpected surprises or unusual activity in their account.

The bank’s systems could even offer money-saving hints. For example, customers could choose to let us compare the price they are paying for gas against what others pay. If their bills are particularly high, our technology could point this out and then suggest some price comparison websites they might want to consider.

This evolution mirrors technological developments in other walks of life. A couple of years ago I used to put reminders for social events in my calendar myself. Today, the program in my smartphone scans my emails and asks whether I want to add the invitations to my schedule.

Many people find such prompts and reminders intuitive, making it easy to organise their life. And for everyone who likes a little extra encouragement, the arrival of AI-based advice in banking has huge potential.

However, not everyone likes these hints and it is important for service providers to respect that. It should be up to individual customers to decide what information they want to receive and when. They are in control.

Our goal is for people to be confident in the knowledge they handle their money better when they are banking with us. We could be like a free personal trainer, helping them stay in financial shape – not just for a few months, but for good.