Greater investment in technology can help banks to cut operational costs and lower bad debt losses, according to research from analyst Gartner.

By offering tools that help customers to manage their money better, banks can avoid losses themselves, says the report.

Banks should be providing their customers with online accounts, which often pay higher rates of interest and attract lower fees but also cost less for institutions to deliver, says Gartner.

“With banks coming under increasing pressure to deliver a range of short-term cost savings, the ways these institutions interact with their customers will become increasingly important in managing costs downwards,” said Gartner research vice president and industry services director Alistair Newton.

“There are a variety of ways in which banks can help customers save money and better manage their exposure to debt while saving the bank money by encouraging greater use of self-service applications,” said Newton.

Financial institutions should set themselves targets to extend their technology offering and provide better access to external data and information, he said.