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The Missing Piece in Banking: Why Emotions Matter More Than Information
Why people keep making financial decisions that work against their long-term interests–even when they know better?
If knowing the right thing to do was enough to make us do it, wouldn't we all be fit, well-trained, educated, and wealthy?
We all know that working out, studying, and saving money is the right thing to do. Yet despite this knowledge, we consistently make choices that feel good in the moment–even when they don't serve our long-term interests.
Banks have traditionally responded to this challenge by doubling down on education and information. They provide their customers with detailed spending summaries, transaction histories, and financial data, believing that more information will lead to better decisions.
But this approach fundamentally misunderstands how humans actually make choices.
The truth is, our decisions are largely guided by our emotions, not just information. This isn't a flaw to be corrected–it's a foundational aspect of human nature that banking needs to embrace. The future of banking lies not in more data or better education, but in understanding and working with the emotional drivers of human behavior.
Only by putting the human perspective at the heart of banking can we create lasting positive financial change. Read on to discover how science-backed emotional banking is transforming financial behavior and creating unprecedented levels of customer engagement and wellbeing.
The Blind Spot in Traditional Banking
Most banking tools today assume that if we provide customers with enough information about their spending and savings, better financial decisions will naturally follow.
But as most banks are discovering, knowledge rarely translates directly into action. Current Personal Finance Management (PFM) tools fall short precisely because they neglect a crucial driver of human behavior: emotion.
Traditional banking tools face three critical shortcomings:
First, they focus too heavily on past behaviors, presenting customers with spending summaries and transaction histories that offer little inspiration for change.
Second, by neglecting the emotional aspect of money management, they fail to create meaningful engagement with their customers.
Finally, and perhaps most critically, their pure information approach often backfires–when customers are presented with cold financial data about their spending or savings, it frequently induces anxiety rather than action.
The result? Tools that not only fail to drive positive behavioral change but sometimes actively discourage customers from engaging with their finances at all.
How Your Brain Really Makes Financial Decisions
One of the biggest barriers to financial wellbeing is our difficulty envisioning and prioritising the future. Present bias leads us to choose smaller immediate rewards over larger future benefits–it's human nature to prioritize what feels good now over what's better for us later.
This is particularly evident in financial decisions. When choosing between buying something we want today versus saving for a future goal, our brains naturally lean toward immediate gratification. The abstract concept of future benefits often feels less compelling than the emotional pull of present desires.
However, when we create emotional connections to our future goals–like visualizing a child's graduation when saving for their education–we can begin to overcome these psychological barriers. The future becomes less abstract and more tangible, shifting our decision-making from impulse to intention.
Banking That Speaks to Your Brain
Drawing from behavioral science research and collaborations with leading institutions, we've observed how digital banking can tap into the brain's reward systems–making the act of saving just as emotionally rewarding as spending. This science-backed approach has led to breakthrough innovations in financial wellbeing, from our clever SaveHacks that work with our natural impulses to Dreams tools that connect our present actions to future rewards.
Savehacks transform the way people discover money to save by making it engaging, personal, and most importantly, fun. Instead of demanding dramatic lifestyle changes, the approach breaks saving into small, achievable steps. It's like fitness–you don't run a marathon on day one. You start with walks that turn into jogs that eventually become long distance runs.
Through personalized saving methods that fit customers’ individual lifestyles, whether through daily adjustments, environmentally conscious choices, or automated methods, banks using this approach have seen their customers save on average €2,000 more per year than they could before.
The Dreams feature tackles one of our biggest financial challenges: connecting with our future selves. When people spend time to reflect and attach images to their financial goals–whether it's a sailing trip around the world, a first home, or a child's university fund–these future dreams become emotionally real.
This emotional connection becomes powerful in decision-making moments. When faced with an impulse purchase like a new watch, seeing your child's proud smile next to their school awards in your savings app creates a powerful emotional anchor. Those meaningful visual reminders help protect your long-term goals from short-term temptations, making it easier to stay committed to what truly matters.
These emotionally intelligent features show how banking can be transformed–rewiring how people feel about saving money and making positive financial choices as rewarding as spending.
Real Results: When Banking Connects with Emotions
Our case studies from banks using Doconomy show the impact of putting emotional intelligence at the heart of banking. Within just two months of using our emotionally-intelligent banking features, 74% of users report feeling better about their finances.
Even more significantly, 28% of people using these tools developed saving habits they didn't have before, showing how emotional banking can drive true financial inclusion.This isn't just about feeling good–it translates into real behavioral change.
But the impact goes deeper than savings alone. When banking becomes emotionally intelligent, we see a transformation in people's relationship with money. The majority of users report feeling more confident and less stressed about their finances. This reduced anxiety and increased confidence creates a positive cycle, making it easier for people to maintain their new financial habits.
By understanding and working with human emotions rather than against them, we can create banking experiences that don't just inform–they transform. This is the future of banking: where financial wellbeing isn't just about numbers in an account, but about creating positive, lasting behavioral change.
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Success in modern banking lies in understanding and working with human emotions rather than against them. The future of banking isn't just about processing transactions–it's about creating meaningful connections that drive positive financial behaviors.
Curious about how emotional banking could transform your customers' financial wellbeing and ability to take sustainability actions? Schedule a demo with us to explore the possibilities.