A Simple Tweak to Increase Financial Wellness, Engagement

Between the economic uncertainty among U.S. consumers caused by the pandemic and some recent high profile predicaments involving new market entrants, now is the ideal time for bankers to stake their claim as true advocates for their customers’ financial well-being.

Too often, however, financial institutions are guilty of merely engaging in virtue signaling when it comes to their level of commitment in truly supporting their customers. But those institutions that truly focus on providing financial literacy and educational resources to their customers are realizing the benefits of those initiatives, most notably through the increased usage of bank services and increased brand loyalty and “stickiness” within their customer bases.

We know, for example, that just 14% of consumers utilize their bank’s bill pay services, and most of these customers tend to be baby boomers and Generation X. Banks are looking to deepen existing customer relationships, drive usage of available services like bill pay and add younger customers; but the first steps toward developing an impactful financial wellness program don’t have to be complicated. The key is focusing in on an existing need that customers and providing immediate, tangible value to them.

Upwards of 80% of consumers in the U.S. overpay their monthly bills — creating an opportunity for bankers. Each of these consumers are in a position to generate savings simply by renegotiating routine services, canceling recurring subscriptions and monitoring for service outages and added fees. Bills like cable, internet, phone, alarms and gym memberships are usually negotiable, especially since all of these providers typically face healthy degrees of competition within their own markets. Consumers are generally unaware of this, or lack the time needed to do so. By providing services like these to their customers, either directly or through strategic partnerships, bankers can become more active participants in supporting their customers’ financial wellness initiatives, and ultimately become more valued partners and advisors over time.

These incremental savings can add up into meaningful amounts for bank customers and are not difficult to identify. Canceling unwanted subscriptions that began as a free trial offer often yields noticeable results. Pairing subscription management or bill reduction with the transaction makes managing bills and associated costs a seamless, frictionless experience for customers. By providing customers a way to easily unsubscribe with the click of a button within the mobile app, banks can both increase customer engagement within the channel and strengthen customer relationships.

Banks are already ideally positioned to help consumers improve their financial wellness: they possess detailed customer information, transaction data and an established level of trust with their customers. The introduction of new technologies and new digital entrants into the retail banking industry have created an increasingly competitive market — particularly with U.S. consumers embracing a digital-first approach to banking. Banks must be more creative in developing ways to connect with their customers and nurture those relationships. The institutions that go beyond merely identifying themselves as financial wellness providers to actively playing a role in supporting customers stand to benefit the most.