Fred Lavoie is Flinks' co-founder and COO. He leverages what he learned through successes and failures to build the future of finance: one that enables everyone to play the lead role of their existence.

Digital Finance is the Way Forward: What to Do and Where to Start

By Frédérick Lavoie on March 25th, 2020

The range of everyday experiences that are being reshaped by the current context is so broad that many financial service providers will simply weather the storm and wait to see where things land. This is a mistake — and a missed opportunity.

Now more than ever, your customers expect you to stay connected to their needs, goals and dreams.

Three ways to make a difference

  1. Provide a robust digital onboarding experience to deliver value faster
  2. Mitigate risk using real-time, comprehensive financial profiles of your customers
  3. Proactively engage with your customers and foster long-term loyalty with advanced analytics

What staying connected means right now

Everyone’s personal, professional and financial trajectories are changing rapidly, with what feels like little predictability. As social distancing forces people to disconnect from each other in the physical world, many financial service providers are suffering from the lack of foot traffic, and brace for an economic crisis.

Whenever there’s a vacuum, something always comes along to fill it: the spread of the coronavirus drives a voluminous number of new interactions in digital spaces. Financial service providers have a unique opportunity right now to grow meaningful connections with their customers.

In fact, being able to cater to your customers’ needs, goals and dreams through your digital experiences will be the key to both your business’ and their own financial stability.

Our current context is laying it bare: digital finance is the way forward.

As digital strategies are being pushed front and center, our perspective is that financial data connectivity and enrichment enable you to start generating positive outcomes now — and set up long-term success for both your business and your customers.

Here a few things that we think will make a difference:

1. Provide a robust digital onboarding experience to deliver value faster

Financial data connectivity enables your customers to share the critical information you need through digital channels, so you can deliver value faster and start building long-lasting relationships with them.

In finance, customer onboarding isn’t just about introducing new signups to your product. It is a complex and regulated process — but digital onboarding experiences don’t have to overcomplicate things by relying on scanned ID documents and PDF uploads. When it takes days before new users can finally receive a service or interact with your app, they are hardly set up for success.

  • Provide a fully digital experience. A number of our clients already power their onboarding process with financial data connectivity and focus on servicing their customers faster. For instance, one company in the lending space gives new and returning customers the opportunity to steady their financial situation in a matter of minutes, without having to set foot into a branch.
  • Accelerate KYC checks. Financial data connectivity cuts the number of steps needed to perform critical KYC checks. If your new users already have a bank account, you can use the information from their Canadian financial institution to verify their identity instantly.
  • Automate routine tasks. Pulling your new customers’ transaction history or official bank statements right from their account also allows you to partially or completely automate asset verification and other routine tasks.

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2. Mitigate risk using real-time, comprehensive financial profiles of your customers

Here’s a hard truth: in many lines of business, the financial health of service providers directly depends on the financial trajectory of their customers. The upcoming months are going to be challenging, with dramatic changes to employment and income situations.

Conventional tools like credit scores aren’t built to capture such quick changes, which leaves you in the dark when it comes to making key decisions about your current and new customers.

Data enrichment is the best way to gain back visibility over what matters to your business. Using comprehensive financial profiles based on your customers’ transaction history and latest patterns, you know where they stand right now, and you can track the evolution of their financial health in real time.

Our Attributes product is built to output key actionable insights on individual customers as well as your entire customer base connected through Flinks. Here are a few examples of insights and how you can use them to mitigate risk:

  • Transactional behavior. How are your customers reacting to the current situation? Flinks’ clients can track unusual changes in their customers’ financial trajectory as they happen — with indicators such as high spend, low deposits, and other trending factors that might signal financial distress.
  • Income streams. As the economy grinds to a halt, you can track what is happening and see what’s coming. For instance, income deposit information allows you to know which customers are working in sectors you determine to be at risk, and if they have access to other income sources and government relief programs. We can automatically flag if their income stops or has recent high volatility, in real time.
  • Actual ability to repay. In the current context, the transaction history of your applicants provides critical insights to detect very recent changes in their risk levels. Enriched transactional data let you know if they have taken new loans — with visibility over both the amount and the frequency of payments or missed payments — as well as their monthly committed bill payments, days of negative balance, and more.

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3. Proactively engage with your customers and foster long-term loyalty with advanced analytics

Many financial service providers are ready to be flexible toward their customers but aren’t equipped to connect with them through digital channels, let alone allow them self-serve. A majority of Canadians are already experiencing various degrees of financial stress— when consumers are in a crisis, requiring them to call and discuss their situation misses the mark for many.

There is a huge opportunity to proactively engage with your customers and foster long-term loyalty. Using advanced analytics on real-time transactional data feeds, you can map possible scenarios, provide options on what to do in their current situation, and monitor changes to their trajectory to help them correct course quickly.

  • Detect early changes in life events. A much higher pay deposit than usual might signify that one of your customers has lost their job and received a severance package. This information enables you to act appropriately and proactively with the resources at your disposal, without having this customer come to you first.
  • Segment smarter. In light of insights on income, cash flow, recent activity per account and committed payment activity, you can better determine who would benefit from specific emergency initiatives or products. 
  • Personalize your interactions. Understanding your customers’ behavior enables you to stand as a financial partner with them. Providing much better and directed customer service when needed will aid in increasing customer retention in these hard times.

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Next step: Move forward with digital initiatives

One thing is for sure: there will be a “before” and an “after” the coronavirus outbreak. While the exact look of what’s to come remains uncertain, the process to get there will lead us to less physical exchanges, and more digital connections.

When you’re ready to move forward with your digital initiatives, Flinks will provide the data connectivity and enrichment tools you need to connect your customers to the financial services they want — and, most importantly, need.

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