HSBC buys into nudge theory
Written by Scott Thompson
HSBC has begun trialling Nudge, pitched as the world’s first banking app combining customer data and nudge theory. Hosted in new cloud IT architecture, it was built in six weeks by a newly formed Scrum team, recruited from leading digital companies; a response, according to HSBC, to traditionally more nimble new entrants. The bank says that the Scrum way of working marks a move away from the traditional rigid ‘waterfall’ approach to IT development, allowing the team to take a customer centric approach to building the app.
HSBC Nudge identifies trends in customers’ spending habits and sends regular, targeted digital ‘nudges’ to make people aware of their expenditure. The 38 types of curated nudges currently being trialled include notifications about the amount of money spent on groceries in a week and updates on how much customers are spending or saving versus others in the same income bracket.
The three month trial, which involves 500 customers, follows HSBC’s recent introduction of a text alert service that warns customers when they are approaching their overdraft limit. Raman Bhatia, head of digital at HSBC UK, says: “We know that many of our customers have good intentions for their financial futures, but that willpower alone is not always enough to drive a long term change in behaviour. By incorporating nudge theory into our digital customer communications, we can encourage customers to adjust their behaviour to achieve their financial goals. By enabling the team to challenge the traditional product development approach through the Scrum way of working, the delivery timeline for HSBC Nudge was significantly reduced – a first for the bank. This approach to technological innovation will be adopted across our business enabling more efficient and agile development of our core banking technologies.”