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Future trends in financial wellbeing - an essential list

Gethin Nadin, Director of Employee Wellbeing, Benefex
May 1, 2019

For many years, financial strains have plagued the workforce. According to a new study of more than 9,000 workers, negative financial experiences still rate as in the top two biggest struggles in the lives of your employees. Although we know there is a direct correlation between health and finances, what many of us overlook is that financial wellbeing is about so much more than just debt and pensions. As the concept of employer-sponsored financial wellbeing continues to evolve, it’s this understanding that will become more prevalent, as will the demand from employees to get a wide range of financial support in the workplace.

The Consumer Experience

We talk about this a lot when referring to the employee experience, but employer-sponsored financial wellbeing forms a big part of this experience too. We’ve seen huge changes to the banking industry as consumers demand products which are easier to understand and interact with. The prevalence of banking apps alone has been responsible for the closure of almost 3,000 bank branches in just the last 3 years.

It is this change in attitude towards banks that will see more people turning to technology companies for their banking needs. The reality is that if a tech company can make banking as easy as shopping with Amazon, consumers will use it. It’s therefore no surprise that the world’s first trillion dollar company is leading the charge. The next 15 years will see banks look more like a partner with technology companies.

What this means for ANY financial wellbeing offering is that it must mirror that same experience your employees are used to at home. If it’s not mobile, anytime and simple, we know it just won’t be used. More importantly, some of our financial decisions need to be made quickly and discussed with family - they can’t be restricted to access while at work. Real-time is critical to better service; no one is prepared to wait for anything anymore.

So, how can employer-sponsored financial wellbeing keep up with the consumer experience? Application Programming Interface, or Open API. This is a function that enables third-party access to (in this example) a bank’s customer data. In the UK, an Open Banking Working Group has been created to facilitate API between tech companies and banks. An Open API can enable personalised financial advice to be delivered to individuals at a time that’s right. This means it will get significantly easier for your employees to open savings, investment and retirement products with confidence.

Here are some great examples of where Open API is being used to enhance a consumer-like experience in banking:
Siri and Paypal integration: Apple device users can now ask Siri to send and request money using just their voice. Capital One are doing the same with Amazon Alexa integration. Moneydashboard: Users of this app can connect all of their bank accounts and credit cards in one place.

As more and more banks around the world open up their data to third parties, the end user will benefit from smoother, easier and faster banking experiences. It won’t be long before this type of integration is commonplace.

More Education

Where are people going for their education if it’s not provided by employers? There’s very little on offer from the Government, so unsurprisingly, employees are turning to the same place they go when they have any question – Google. The most Googled financial questions in the UK include; “What is an APR?”, “What size mortgage can I afford?”, “Does a student loan affect my credit rating?” and “What loan should I go for?” It’s obvious that financial education is pretty poor in this country and employees need much more help than they are getting.

Talking about money in school only entered the curriculum a few years ago. So, if employees are joining the workforce with little or no financial education, and are struggling with simple everyday calculations like working out your correct change, how can we expect people to understand complex products like pensions?

Is there a solution? As always, there isn’t one answer, but a host of possibilities. There’s an inherent link between employee benefits and financial education, so it’s absolutely in an employer’s interest to ensure their employees’ wellbeing is looked after.

Employers must first alter their employees’ perception of financial education and planning at the outset. People are disengaged from financial planning by a misconception that it’s only for the wealthy and that it’s got a complex and secretive history.

However, there are educational tools that employers can make use of which aren’t commonly used right now, but which will be making a huge difference in future as their popularity increases. As well as some examples of great services employees can already get hold of:

MoneySavingExpert is a great example of how one organisation has made financial wellbeing accessible. This MSE website can help people with searchable advice to manage their specific challenges through tools like budget planners, but users can also learn generally about things like payday loans, pensions and financial products before making their decisions. There are also pointers towards cheaper travel options, good value utilities, and even mortgage guidance. It’s the simplicity of MoneySavingExpert which is the key to how employers can engage their staff in financial wellbeing. Education, like technology, should be easily accessible and simple to use. Even products and apps like Moneybox (which rounds up your online and card purchases, and saves the spare change into a ‘moneybox’) and Sweatcoin (which converts your steps and exercises into virtual currency) are basically gamifying saving, which not only helps us put money aside, but makes sure we’re constantly aware of our finances and not burying our heads in the sand.

Artificial Intelligence

For years, artificial intelligence has been synonymous with Sci-Fi films, but it is becoming more prevalent in modern life. When Uber calculates how long it will take to get a car to you and when to charge surge pricing, you’re witnessing machine learning (a particular approach to AI). Gmail successfully filtering 99.9% of spam emails; Facebook suggesting friends’ faces to tag in photos: all AI.

In the world of personal finance, we are seeing the emergence of AI and machine learning to help people improve their financial wellbeing.

There are personal banking apps like Acorn that connect your bank accounts and credit cards. As you spend, the app predicts your future spending habits and your future income based on what has happened previously. We can already see examples of AI at work when we apply online for credit. Past data about repayments, number of loans taken out etc. is being used to customise an interest rate before offering credit.

One of the most anticipated applications of AI in finance is how face-to face interaction can be replicated. As we’ve seen, the closure of bank branches and the cost associated with delivering a human-to-human service is becoming challenging. We are starting to see banks invest in chatbots powered by AI to help get their customers questions answered. A similar application is being used to replace financial advisers. Robo-advice isn’t very different to a form-filling exercise, but it enables employees to reduce the cost of obtaining financial advice. Online advice tools are available any time of the day and enable people to digest information easily and quickly. After answering a few questions, robo-advisors use an algorithm to present relevant information. The wide capability of Robo advisors means they can open new accounts, gather information, assess risk tolerance, explain complex topics, monitor investments and develop a financial plan. Deloitte suggest that automated financial advice is the next frontier in personal finance with 11 million potential adopters of simple financial planning using automated advice.

The Future

Ultimately, employers should be focussed on employee financial wellbeing initiatives that become part of an employee’s daily lives. Financial wellbeing is about empowering employees to achieve all the things they want to do in their lives, rather than just the absence of debt. There is a strong case for ensuring employees are educated in the areas they want help with and that employees are then sign posted to where they can take active steps to improve their own financial wellbeing.

As technology continues to dominate the lives of your employees, ensuring your financial wellbeing strategy is innovative and current is critical. Technology that empowers and enables employees to take quick steps to improve their financial wellbeing will ultimately have a positive impact on the workplace.


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