Personetics launches new capabilities to help banks solve the overdraft crisis

By Edlyn Cardoza

Personetics, the leading global provider of financial data-driven personalisation and customer engagement solutions for financial institutions, recently announced a suite of “Proactive Cash Flow Management” capabilities to help banks face the growing competitive, regulatory and consumer requirements to combat overdrafts. 

The overdraft landscape in the US is at a watershed moment, with leading banks announcing changes to their overdraft offerings in recent months, including scrapping fees, extending grace periods, or providing short term loans. 

Personetics’ Proactive Cash Flow Management capabilities are the first to enable banks to act proactively to address overdraft situations, not just reactively. By analysing customer transaction data and cash flow patterns, banks can understand customers’ situations, accurately predict when an overdraft might occur, and proactively offer treatment options that address customer-specific needs. The treatment approach is tailored to the customer’s situation and the likelihood of overdraft.   

By proactively engaging customers on cash flow issues, banks can reduce the number of overdrafts and negative balance situations and build stronger relationships with customers, leading to higher customer satisfaction and loyalty.  

Personetics Proactive Cash Flow Management capabilities are comprised of:  

• Customer Enrichment: determines the customer profile to help banks understand each customer’s unique situation and root causes. Customers may fall into one of four personas:  
• Paycheck to Paycheck: customer’s income may be volatile or barely enough to cover expenses.
• Hardship: a customer has experienced a recent financial hardship such as income loss or significant expense
• Mismanagement: a customer has mismanaged the timing of their deposits or payments during a sensitive cash flow period
• Affluent Mistake: a customer has plenty of funds deposited overall but mistakenly has gotten into an overdraft condition on a particular account
• Cash Flow Prediction: Identifies the likelihood of customers incurring an overdraft situation and the likely timeframe. Personetics’ Cash Flow Prediction model has proven accurate in predicting 70% of overdraft situations.

• Tailored Treatment: Personalised insights offering treatments to address the potential overdraft condition.