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3 easy ways to help drive financial wellness for your customers

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Financial wellness is pushing out traditional banking and forcing FIs to pivot how they nurture their customers. But what is financial wellness, and how do you nurture it?

Financial wellness, which is often referred to as financial health or well-being, means being able to effectively and confidently manage your finances throughout your entire life. 

Financial wellness was once a buzz term, not yet a mainstream narrative adopted by financial institutions and technology companies to help customers spend wiser and save smarter. Today, financial wellness is the lifeblood of almost every FI hoping to win customers (and keep them). 

Among others, you’ll hear it used interchangeably with terms like “financial freedom” or “financial resiliency”, and over the years the approach to financial wellness and how people can achieve it has evolved—but the real meaning behind it hasn’t. 

If you think about your average customer’s banking activities, it’s easy to analyze their spending behaviors and habits and ask yourself questions like: 

  • Why does this customer work so hard at saving money? 

  • Why do they set aside money each month, open multiple savings accounts, use rewards or cashback credit cards, or deposit funds into an LSA? 

  • Why have they opened this specific savings account, or applied for that type of loan? 

The answer is simple: people want to be financially well. But getting to that point isn’t as simple. So let’s break down exactly what financial wellness is, why it matters for your customers, and three easy tips you can use to drive it. 

What is financial wellness?

Like I mentioned above, financial wellness is generally taken to mean the ability to manage your finances, or feeling secure about your financial future. 

For a new parent, that could mean being in a financially healthy position where they can tuck away a certain amount of money every month to save for their child’s college education, and still be prepared to retire and cover their expenses.

For a millennial, it could mean having enough disposable income to renovate a house and save for the future, while for others, it means being able to pay down credit card debt. For you, it could mean comfortably saving for retirement or helping your child start their own business.

Again, it sounds pretty simple: make money, save money, and you’ll be financially secure. But that’s not always the story for everyone and, more often than not, it can be a struggle for a lot of people to achieve financial wellness. That’s mainly because financial wellness isn’t about managing money as you grow older. 

When your customers are financially well, it means they are able to:

✅ Make sound financial decisions, both in everyday spend and in saving for the long term

✅ Spend within their means, having a clear, more holistic understanding of what those means actually are

✅ Manage financially in times of hardship and emergencies 

✅ Plan for and be financially secure in their future

How your customers achieve financial wellness—how they get to that point where they feel secure about their finances and confident in how they manage them—looks different for everyone. 

Financial wellness is more complex than just being able to manage our money. While many of your customers could go through the journey of achieving financial wellness alone, as a financial institution, you have a very real opportunity to help your customers achieve it in ways that make sense for them—not just where they are in life now, but where they’re headed, too. 

And that’s exactly what you should and can do for your customers. Make it easier and more realistic to achieve financial wellness. 

Why financial wellness actually matters for your customers

It’s not just the pandemic that has spurred the need for financial institutions to build stronger, more human relationships with their customers. 

In recent years, people have been turning to their banks for help with their financial wellbeing—there’s a strong demand from customers for their banks and credit unions to help them achieve their goals. When that doesn’t happen, customers turn to alternative service providers and banking tools to take financial wellness and spend management into their own hands. 

That’s because, as customers, we expect more from our financial institutions today than we ever have, and sometimes, FIs fail to deliver. It’s a learning curve for everyone, but the give-and-take relationship FIs want to have with their customers doesn’t work if there’s not enough give. This is based on a myriad of challenges, many of which banks and credit unions are trying hard to rise to. 

But let’s consider a few things:

👉 Customers know that data is like currency—it’s valuable. But if they’re giving their data to you, they want something in return. 78% of customers are happy to share their banking data, so long as they get better, faster services in return. 

👉 Customers also want more personalization. 54% of customers want more specific, real-time banking offers, making it clear that generic service and product offerings don’t cut it anymore. 

👉 Customers don’t have many incentives to trust FIs. In fact, 41% of the time, customers think the products and services their banks offer them are offered only with the bank’s best interest in mind. 

So, where does financial wellness come in? 

Customers will go where financial wellness follows

Financial institutions have long focused on milestones—your customer’s first checking account, their first loan or line of credit, their first time joining finances with a partner, or opening a savings account for their child’s college fund.

In other words, banks have traditionally been legacy-focused as opposed to wellness-focused. 

But financial wellness, and how your customers get there, isn’t based on those milestone moments. It’s actually driven by everyday behaviors and decisions, big and small. A customer deciding to get a travel rewards credit card is just as important as a customer who gets a line of credit to pay for their university education. 

Most financial institutions have typically hung out on the fringe of these decisions, aside from handling transactions or issuing loans. Maybe a mobile app or a digital banking tool that provided automated monthly statements, for good measure.

Today, that almost hands-off involvement in customers’ everyday financial behaviors doesn’t allow room for financial wellness, so customers go elsewhere. 

⚡️ Customers want you to be involved in their financial wellness journey—they’re not just looking for a place to park their money, but guidance in making it go further. There’s been a 21% increase in customers who place more value on experiential factors with their FI than rates.

⚡️ People know their banks have it in them to help, and they want you to. 26% of customers feel their FIs could be offering more quality and personalized services. 

⚡️ Your customers will turn to you as a trusted partner in their financial wellness journey if you’ll be there for them. 42% of customers, for example, want their banks to provide them with timely insights and solutions as their needs arise.

Customers will turn to financial institutions and big tech that will help them where their existing banks won’t. And I’m willing to hedge a bet that your FI doesn’t like attrition 👩‍💻

The underbanked, a significant customer segment, continue to be ignored

People worry a lot about money. Paying down debt, saving for the future, retiring with enough to live on. Especially for millennials and other underbanked customer segments like SMBs, financial wellness can feel out of reach or next to impossible. This isn’t an opportunity to push more products but, rather, help customers. 

Consider that more than 34% of US workers are in the gig economy, and 99% of all businesses in the US are microbusiness. 

For years, these underbanked segments have been looked at as having niche needs that are too difficult to meet on a larger scale—so they become overlooked by traditional FIs. After all, if no one else is going after these segments, why should you?

The answer: because big tech and neobanks will. And they already are

Big tech and neobanks focus on the customer, especially when it comes to the adoption of digital tools as wellness tools—like the ability to have a holistic view of one’s spend, manage money, and perform virtually every banking need in one app. This puts financial wellness front and center for customers, rather than products.  

These underbanked segments represent a unique opportunity to do more with your existing digital tools and create optimized, digitally engaging solutions for people like gig workers who could be extremely loyal customers. 

👀 40% of millennials would bank with big tech like Apple or Google 

👀 71% of customers would use entirely digitally-generated support for banking services 

👀 73% of customers feel sharing their data should result in more personalized help and advice 

👀 78% of digital nomads would use Google or Amazon for their banking needs

👀 49% of customers will stay loyal to their bank based on the quality of their service and customer care

These customers may not be turning to your financial institution right now, but what if a traditional FI offered the level of personalization, tools, and services they need? They might just turn away from big tech and come knocking on your door. 

Digital tools must become digital wellness tools 

I mentioned above that big tech and neobanks are attractive to underbanked segments because they focus on empowering customers to take action with their finances, rather than just make product recommendations. 

Of course, these customers know their data is being used like currency, but they get something out of it, too. So they’re willing to share. 

That’s because these tools they’re using to manage their everyday finances aren’t just banking tools—they’re wellness tools. 

Let’s say I have an everyday checking account with your FI, and I use your mobile app to track my transactions. Thanks to your app, I can also check my other accounts (even if they’re not with your FI) and download statements of my credit card spend. 

That’s great, but it doesn’t help me build towards my financial wellness goals. 

What would help is if I had customized insights based on my spending and purchase behaviors delivered to me in the app. Or recommendations on where I could be saving money on my weekly grocery bill or if I’ve gone over my average spend this month on a utility bill, and how I can scale back. 

Having these kinds of personalized insights, along with tips and advice that make sense for me as a human (and not just another customer), makes me more literate about my finances and more aware of how I can spend wiser and save smarter. 

Your app becomes a wellness tool rather than another mobile banking tool. 

Transforming your digital banking tools into digital wellness tools is absolutely necessary to delivering on your customers’ needs and keeping them from jumping ship. 

>> 33% of people believe they won’t even need a bank in the future—but what if your FI was more than just a bank? 

>> Only 40% of financial institutions offer personalized financial management solutions and advice—your FI has an incredible amount of potential here. 

>> Worldwide, 42% of people who own a smartphone don’t even use mobile banking. There are opportunities for incentivizing would-be customers to use your digital tools if they do more than the basics. 

This doesn’t mean you have to throw the baby out with the bathwater—but you do have to harness the opportunities in front of you to transform how you help your customers succeed through your digital banking tools. 

Speaking of opportunity: if customers want to achieve financial wellness, and you want to be the FI that helps them achieve it, how the heck do you actually do that?

3 easy tips to help drive financial wellness for your customers

If customers could learn about their spending and understand their financial habits, they could begin to build and work towards their own version of financial wellness. You’re probably thinking, “Well, what’s stopping them?” 

Before you can answer that question, you need to answer this one: What stops countless customers, especially millennial ones, from building healthier financial habits?

The answer lies in our banks and the solutions they offer us. 

Let’s unpack that. 

Normalize financial literacy and awareness 

Not every customer will have a parent checking in with them, advising them to pay off a credit card and not just the minimum monthly payments of interest. You could be that “guardian angel”, looking out for your customers by first helping them understand the basics of managing their finances. 

Whether a customer has just signed up with your bank to open a new account or has kept a basic account or line of credit with you for years, giving them the resources they need to learn about their finances could be the difference between a customer who’s struggling, and one who’s thriving. 

Financial education, information, and literacy should be the norm for every customer that banks with you—from that first digital touch-point to everyday tools, push notifications, email marketing, in-person interactions, and more. 

In other words, no customer who walks through your physical or virtual doors should be left hanging when it comes to understanding how to spend, save, and manage their finances. 

Consider that:

  • Customers who are knowledgeable about their finances will be better prepared to handle financial emergencies and navigate complex financial situations

  • There’s a significant amount of trust that can be built if customers feel they’re being looked out for by their financial institution

  • Customers who understand their financial situation can make more informed choices about the products, tools, and solutions you offer for their unique needs

I’m not just talking about millennials, here (though we need help, too 👋). Financial illiteracy isn’t reserved for the younger generations. 

  • 44% of Americans, for example, don’t have enough cash to cover a $400 emergency

  • Meanwhile, 49% of Canadians claim they’re $200 or less away from being able to cover their bills

  • And around 6 million Britons believe they will never be debt-free 

What all of this means is that, while customers may bank with you, have multiple accounts with you, and possibly even invest with you, they’re not necessarily financially “well”.  This is why normalizing financial education and literacy is crucial.

What if there were more education, more information, that was targeted towards customers’ actual needs? What if they had digital resources that could easily help them learn about saving, interest, inflation, and all of the buzzwords we hear as customers but don’t always understand?

Provide the right content at the right time 

We’re all well aware that trust and loyalty are pretty pervasive issues across the financial services industry. Customers may bank with you, but that doesn’t mean they totally trust you. That’s okay; trust is a marathon, not a sprint. 

But there’s a solution that could just help with that. It’s called “content marketing” and it’s the perfect outlet for helping to educate your customers. 

46% of customers expect their FIs to provide educational content, while 50% would stay loyal to a bank or credit union that provided them with educational, helpful content. 

That means that truly informative content—blogs, white papers, content upgrades, downloadables, ebooks, tutorials, webinars, infographics, videos, you name it—are not just strong digital marketing tools and tactics but necessary customer education tools. 

The catch? Well, there isn’t one. In fact:

  • 78% of customers will perceive a relationship between themselves and an organization that provides custom content

  • In comparison to traditional marketing, educational content marketing can generate three times as many customer leads per dollar spent 

  • The average engagement rate for educational content from financial institutions is 70%

Content that truly educates, informs, and helps customers will also benefit your institution through the inherent advantages of content marketing, including its effectiveness in increasing brand awareness, building trust with your customers, reducing churn, and driving new traffic to your digital channels. 

🔥Hot tip: if you’re not sure your content is educational and informative when creating a piece of content, stop and ask yourself: “Is this content helpful for my customer, or promotional for our bank?” 

Personalize your outreach (and not just your products)

As customers, we’ve grown accustomed to a serious level of personalization that we expect from everything—not just our grocery delivery and streaming services, but our banks, too. We trust these services to know us on a deeper level, so we give up our data and get lots in return—not just product recommendations, either. 

That’s because personalization isn’t just about products, something big tech is already capitalizing on. Instead, its true potential lies in building authentic, trust-based relationships with customers by using their data to understand what their real needs are, then serving up advice, recommendations, services, education, and information that benefits them on a wholly human and personal level. 

There are 3 immediate benefits to doing personalization well:  

  1. Personalize at scale—if you know what’s stopping your customers from achieving financial wellness, you can offer the right advice, solutions, and tools to other customers like them, going through similar financial journeys

  2. Personalize at the right time—knowing what your customers are struggling with allows you to personalize advice and solutions at the right time, right when they need it 

  3. Encourage healthier habits—if you truly know what your customers’ challenges are, you can provide a sequence or “curriculum” of solutions and advice that help them build healthier financial habits to succeed 

But the advantages don’t stop there. 

Let’s say you have a wealth of customer data that you’ve gathered over months or, in the case of many FIs, several years. You have customers who have banked with you for a long time, but you’re not sure what half of them are up to, or where the other half are in their journey towards financial wellness. Don’t worry, there’s something you can do with all of that data 👀

In fact, there are four key things you can start doing to nurture your customers where they happen to be in their journey right now, all through data-driven personalization: 

  • Personalized insights, tips, and financial advice help customers make healthier financial decisions

  • Messaging and product recommendations become more intuitive and tailored to the customer (not the bank) 

  • Tools become more engaging and wellness-centric, putting the customer first 

  • Over time, customers are better equipped to manage and grow their finances, spending smarter and saving more wisely 

Once you've started nurturing customers with the right data and insights, the sky’s pretty much the only limit to what your bank can do for its customers. Unless Elon Musk decides to open a bank on Mars. Then...space is the limit? 

Financial wellness is a marathon, not a sprint

Providing customers with the tools, services, support, guidance, and the data and insights they need to understand their finances and manage their money is the best thing you can do for your customers—above and beyond being their primary FI, or holding the most wallet share with them. 

But this isn’t a sprint, it’s a marathon. It takes time to build trust with your customers and to prove that, unlike 94% of banks and credit unions, your FI is prepared to keep its promises driving financial wellness and resilience for its customers.  

Have you ever noticed how the most successful financial institutions are always learning from their customers, their behaviors, and what the data tells them? Do this consistently, and your FI will be top of mind (and wallet). 

When, you ask? When it's your customers that begin turning to you, listening and learning from you—and banking with your FI for life. 

Want even more ways you can drive financial wellness for your customers? We’ve got a guide for that 😉 Grab your free copy of our Financial Wellness guide below 👇

Meet the author, Liv 🌿

Liv is our Director of Marketing and a B2B marketing expert. She's worked across multiple industries, and has successfully turned her apartment into a plant jungle.

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