UK banks turn to spending alerts, advice

Britain’s biggest banks are planning to send personalised spending alerts and in some cases money management advice to their mobile banking customers as they strive to shore up brand loyalty in the face of growing competition.

Lloyds Banking Group and HSBC will launch a range of new alerts from this year, such as informing clients whenever they spend on their card or when a bill is higher than usual.

The move is an example of how traditional lenders are expected to start harnessing customer data in new ways as competition and changing consumer behaviour threaten their decades-old business model.

New regulation has left banks more vulnerable to threats from players like digitalonly banks Monzo and Revolut, which are trying to gain a foothold with apps and cut-price fees and by accusing lenders of ripping off consumers.

The digital banks also plan to increasingly use customer data to recommend products, from insurance to energy.

HSBC expects its alerts will become increasingly tailored around customers’ spending habits. Some could take a more informal, friendly tone, said Josh Bottomley, HSBC’s global head of digital, data and development.

“It will start to feel like your personal trainer in the gym.”

Bottomley said that in the past banks worried customers would find this kind of initiative intrusive, but today consumers are used to regular notifications and personalisation.

The messages will offer insights into how customers use their cash and prompt them to take action, for instance by feeding money into a savings account or rolling over their credit card bill into a lower interest loan.

Lloyds said it could also look at nudging customers towards changing the way they run their finances. It will offer new push alerts on its app, with the first to be launched in 2018, said Nick Edwards, product owner, consumer servicing transformation at the bank.