Financial Wellness Market
Two key trends in the financial wellness space are the increased use of artificial intelligence and data analytics in offering personalized services, and the increase in the number of programs offering student loan benefits. Additional details on these trends, as well as the analysis of five key players in the financial wellness space, have been provided below.
Key Players Analysis
- Mercer is a global consulting firm that specializes in talent, health, retirement, and investments. Some of its health and benefits offerings include employee benefits, global benefits, and overall health and wellbeing.
- In 2016, the company launched a financial wellness solution, which was a combination of a digital platform and access to established financial services providers. At the time of launch, it had added Experian, Plaid, Transamerica®, Avant, and CommonBond.
- Mercer's only financial wellness offering is its Mercer Financial Wellness solution, which is primarily targeted at employees and employers.
- The solution is a "mobile-first digital experience helps busy individuals identify areas of personal financial opportunity and offers access to best-in-class resources to help meet their financial needs."
- Mercer's capabilities in this regard can be summarized into three categories: asset growth, liability reduction, and income/expense management.
- The asset growth offering provides tools and resources aimed at "savings/managed accounts, retirement/transition counseling, rollover IRAs, robo-advice for savings outside of retirement plans."
- The liability reduction offering focuses on "short-term/emergency loans to address cash flow challenges, student loan re-financing, credit score access and awareness."
- Lastly, the income/expense management offering allows individuals to focus on budgeting, financial coaching/investment education, and tax guidance.
- The company also has the Mercer Money platform, "a financial education and wellness portal that not only provides personalized education and nudges to engage your employees in topics that are relevant to their individual circumstances but also provides practical tools to help them act on this new knowledge."
Recent News and Initiatives
- In January 2020, Mercer rolled out a new platform, Mercer 365, that give employees access to wellness vendors round the clock. At the moment, the platform gives access to 14 "service and health-care providers, including MediResource Inc., SSQ Life Insurance Co. Inc., LIFT Digital inc. and SilverCloud Health Ltd." Additional features include access to health assessment tools and wellness options such as fitness, telemedicine, anxiety coaching, and much more.
- In July 2019, Mercer partnered with Wealthsimple to create Mercer InvestWise, "an easy-to-use digital saving and investing solution for the Canadian workforce to manage their personal finances, including their retirement savings."
- Late 2019, Mercer launched Mercer Money, a platform that utilizes open banking to provide a comprehensive dashboard with a real-time view of an individual's finances, including savings, debt, current account, mortgage, and investments.
- Mercer also launched Elect Engage last year to make it easier for small and medium-sized enterprises (SMEs) to buy and manage their employee benefits such as getting favorable rates for insurance quotes, from anywhere in the world.
- Prudential Financial provides diverse financial services such as life insurance, annuities, retirement-related services, mutual funds, and investment management.
- Financial wellness is one of the four services it offers to employers aside retirement, group insurance, and pension risk transfer.
- For starters, Prudential Financial has a digital financial wellness platform that has been adopted by 3,000 organizations and has reached more than seven million individuals.
- The company also has an online mobile-optimized financial education program, Prudential Pathways®. The program has been adopted by 600 employers.
- LINK by Prudential allows employees to create profiles wherein they can establish financial goals such as purchasing a home, building an emergency fund, and much more.
- Prudential also offers financial coaching via phone calls and a one-way screen share.
- The company also offers student loan assistance, "an online resource that offers loan consolidation and repayment options, and allows employers to make repayment contributions." This service is provided through Vault, a student loan technology benefits firm.
Recent News and Initiative
- In April 2019, Prudential expanded the features and tools of its financial wellness platform, by adding services such as LINK by Prudential which leverages AI technology, adding financial coaching, and expanding needs-based and life events solutions.
- Prudential has partnered with GreenPath Financial Wellness to offer debt management tools and access to debt professionals. "Prudential’s employer clients will be able to offer workers a free session with a certified financial counselor to establish goals and explore debt repayment options. For a fee, employees or members who participate can also choose to enroll in a formal debt management plan, which is designed to pay off outstanding balances in less than five years."
- Prudential Financial completed the acquisition of Assurance IQ in October 2019 in a $2.35 billion deal. According to Prudential, the acquisition adds an "established direct-to-consumer channel to reach underserved mass market." Assurance IQ provides users with personalized product recommendations such as life insurance, all online.
- In 2019, the company announced a $180 million commitment to tackle complex problems facing the youth, with financial wellness promotion being one of the anchor programs.
Bank of America
Bank of America (BoA) is "one of the world’s leading financial institutions, serving individual consumers, small and middle-market businesses and large corporations with a full range of banking, investing, asset management and other financial and risk management products and services."
- BoA's financial wellness programs are available to "companies that utilize products and services from Bank of America Retirement & Benefit Plan Services."
- Its financial wellness program includes five key approaches:
- A multi-channel service that employees can access in person or via online channels or on the phone.
- Marketing and communication that increases employee participation, which saves employers time, resources, and money.
- An online education center, Better Money Habits, "with extensive resources, tools and educational material that addresses every life stage, including content created in partnership with Khan Academy."
- Access to professional financial advisors/counselors through the employee's preferred communication channel.
- Regular curriculum updates that provide year-round employee engagement.
- The Better Money Habits platform provides lessons on 10 topics: credit, debt, savings & budgeting, home ownership, auto, retirement, college, privacy & security, personal banking, and taxes & income. The videos on the site are bite-sized and explained in plain language to simplify complex financial topics.
Recent Initiatives and News
- BoA holds a yearly Better Money Habits retreat targeted at young adults. The retreat seeks to help them "to identify and focus on the financial goals that matter most to them — not to somebody else." The last edition was held in partnership with Buzzfeed.
- BoA also partners with non-profits and community organizations to bring Better Money Habits to underserved communities. The company has 2,200+ employees in its Better Money Habits Volunteer Champions team who teach financial wellness to families and individuals.
- The company has also introduced a 'Financial Life Benefits' for its corporate clients' employees, which will include "401(k) and health savings accounts, equity compensation and nonqualified deferred compensation plans." The tool aims to enable employees to gain financial control and prepare for their retirement.
- BoA runs an annual survey that provides information for its Workplace Benefits Report. The report seeks to "better understand the needs, desires and aspirations of both groups to help deliver comprehensive benefits programs in the workplace."
Movencorp (Moven and Moven Enterprise)
- Moven is a fintech platform that pioneered the idea behind linking bank accounts and credit cards to a mobile app in order to track and advise on spending.
- The company was founded in 2011 as a mobile banking and savings app, but over the years, the company has added financial wellness as one of its core offerings.
- At the core of Moven is an algorithm-based engine that provides real-time monitoring that facilitates "personalized spending insights and prompts that help consumers live smarter financially."
- The app tracks spending across major categories such as transportation, groceries, and food through the Spending Meter feature.
- The Spending Meter displays different colors depending on how well the user is meeting their set financial budget.
- Users with short-term goals can use the Moven Stash feature to keep money away for things like rent or immediate road trips.
- Users can also compare current spending habits and patterns against a different period to see how their behavior has changed.
Recent News and Initiatives
- Moven was recently granted a patent for its digital financial wellness product; the patent is called "Methods and Apparatus for Promoting Financial Behavioral Change." The technology "includes a digital feedback communication loop that shows consumers where they are spending their money and how their behavior may have changed."
- Movencorp announced a partnership with Saudi Arabia's Saudi Digital Payments Company (STC Pay), which will "provide Moven's patented financial wellness platform solutions as STC Pay becomes the Kingdom's first fintech neo-banking service under an Electronic Money Institution license."
- The company has also partnered with Inlaks, an African Information Technology systems integrator, to "provide personalized smart-banking technology solutions to the financial industry." Russian e-wallet provider, Yandex.money has also partnered with Moven for the same reason as Inlaks.
- In late 2018, the company announced that it was expanding the footprints of its Moven Enterprise offering globally "to help banks deepen their digital customer engagement and drive new revenue streams while significantly reducing attrition and acquisition costs."
- FinFit is a fintech company that serves as an alternative to payday lenders and high-interest credit cards by offering a program that particularly reduces the risk of entering a cycle of expensive debt.
- It does this by providing "a self-directed online experience that lets employees measure their financial well-being and provides fun, educational resources and tools to increase their financial knowledge and drive results."
- The company was founded in 2008 and currently serves 125,000 clients.
- Some of its wellness products include early wage access, prepaid cards, loans, student loan services, and many more.
- Through its WageNow offering, employees can request for a fraction of their earned income before payday, up to 50%. This service is free and requires no subscription fee, flat rate per transaction, or fraction of the earnings requested.
- FinFit also offers a platform through which employees can take regular "financial assessments which involve a series of questions that help FinFit better understand each employee’s current financial situation."
- As a result of this assessment, employees get a personalized wellness score, a visual budget, benchmarks to see how they compare with their peers, an "actionable plan that includes personalized tools and resources to improve their financial health," and real-time feedback.
- Employees also have access to financial coaching from certified financial counselors. Employees can seek help on diverse topics including student loan decisions, mortgage, the effect of life events on their finances, and much more. In addition to the aforementioned, employees also have access to resources, worksheets, and checklists to further help them improve upon their financial challenges after talking to a counselor.
- FinFit also provides employees with a financial dashboard called MoneyView, which they can use to securely link their bank accounts, track spending, identify trends, set goals and budgets, identify their net worth, and receive alerts.
Recent News and Initiatives
- In late July 2019, FinFit raised $7 million in series B funding taking the total funding it has received to $42 million. The company had earlier received $35 million in a debt refinancing round in March 2018.
- In February 2020, the company announced that its WageNow offering will no longer attract transaction or subscription fees. David Kilby, the President of FinFit adds that "We believe this valuable service should be offered at no charge to employees to help manage cash flows. Our goal is to help employees achieve financial health. By offering free access to their earned wages, we enable employees to control their paycheck while ensuring they are not further injured by additional fees."
- FinFit recently announced that its platform will be available on the Virgin Pulse ecosystem. Through this partnership, "Virgin Pulse clients can provide this valuable benefit to their employees with no need to go through additional contracting, review, or technical set up."
- In August 2019, FinFit launched unlimited and live telephone and online financial coaching for all the members on its platform. Members can either call in or mail their concerns during business hours every weekday. Each counselor is certified by AFCPE and NACC, and must have recorded a minimum of 500 hours offering financial advice to individuals.
- Mid 2019, FinFit launched 20 new financial calculators to the public and not just members of the platform. In early 2019, it also launched the FinFit Visa Prepaid Card, which "simplifies money management and is free to all FinFit members."
Financial Wellness Trends
Increased Focus on Student Loans
- In the United States, about 44 million people collectively owe $1.5 trillion in student loan debt and as many as 70% of college graduates leave school with student loan debt.
- It is, therefore, no wonder that employees rank student loan benefits only behind paid time off on the list of the most-preferred perks among young employees according to a survey by the Society for Human Resource Management.
- As such, as younger people enter the workforce pool, this trend would continue to grow.
- In the 2018 EBRI survey, 32.4% of employers said they were offering or planning to offer some student loan benefits" such as a student loan debt consolidation or refinancing service or a student loan repayment subsidy that is employer-paid." This number has risen to 35% in the 2019 edition of the survey.
- Another survey by the Society for Human Resource Management, only 8% current offer student loan benefits, more than double the 2018 figures.
- Many companies will seek to leverage this trend to compete in the employment pool. However, the attending effects are beyond filling vacant positions.
- For example, 50% of workers with student loans say they have to sacrifice their retirement savings to pay their student loan debt. Therefore, a debt program that improves an employee's retirement standing is "mutually beneficial to both workers and employers," seeing that 86% of workers will commit to staying with for five years if they help them repay their student loan. By inference, this should reduce employee churn and drive demand for student loan benefits in financial wellness programs.
Increasing Use of Artificial Intelligence and Data Analytics
- The primary driver of the use of analytics in financial wellness programs is the importance of tailoring benefits, resources, and tools to each individual's needs. According to Accenture, "Digital technologies, such as artificial intelligence (AI) and analytics, are the best way to deliver the level of personalization employees expect, at the scale and competitive pricing companies desire."
- Furthermore, seeing as employee needs can change per time, the use of artificial intelligence and data analytics allows the program engine to adapt per time as life events happen and trigger a change in behavior.
- The same way ecommerce and other data-driven companies leverage demographic data and behavioral data is the way financial wellness programs and solutions are beginning to leverage analytics and machine learning algorithms "to determine whether an employee is making progress or might need some extra assistance to stay on track."
- This use of data is also imperative for the employer as they also need to measure key performance indicators to know how well the programs are doing — what is working, what needs fixing?
- For companies offering financial wellness programs, the use of analytics is non-negotiable, if they want to remain competitive. Importantly, they would increase uptake and prompt user actions where and when it matters most, leading to improve return on investments.
- As new frontiers are explored in the financial wellness space, being the first mover with regard to new technology can set the company apart as a leader. For example, Moven remains the only fintech and financial wellness platform to get a patent for its digital financial wellness product.