According to a 2024 Financial Wellness Study by Bank of America, 64% of employees are stressed about their financial situation, and 67% believe that living costs are outpacing their income growth. Workers often look to their employers for help, and in many cases, companies are responding by adding financial wellness programs to their benefits packages.
As experts in financial programs, banks and credit unions have a prime opportunity to strengthen customer relationships with financial wellness offerings. When only 11% of people feel a sense of financial belonging with their banks, it illuminates the need for solutions that enhance customer loyalty.
Employers and account holders need access to tools, education programs, and specialized accounts, and financial institutions face increased competition and need new ways to increase revenue. With average customer acquisition costs at nearly $500 per person, creating stronger relationships that reduce attrition can improve the bottom line.
Here are a few ways to strengthen customer relationships through financial wellness programs.
Financial Education
Building trust is a key factor in strengthening customer relationships. Customers want to feel like you have their best interests in mind, rather than feeling like another number or faceless dollar sign. Education programs are one of the best ways to establish trust and build rapport.
There is a huge need for improved financial literacy. According to TIAA, U.S. adults answered only 48% of its 28 personal finance index questions correctly in 2024.
Webinars, lunch-and-learns, pamphlets, blogs, and video education are just a few ideas that can be implemented at a relatively low cost. Topics should include immediate needs like effective budgeting and spending (more than 4 in 5 Americans say they overspend) and student loan repayment.
It’s important to also look at medium and long-term needs like healthcare expense management and retirement planning.
Healthcare Expense Management
Healthcare is costly in the U.S., with an average annual outlay of $13,000 per person. Health insurance coverage defrays some of those costs, but tax-advantaged tools like Health Savings Accounts (HSAs) help people better manage their financial situation.
Most healthcare programs and plans take care of the here and now. However, HSAs have benefits that go beyond short-term needs. HSAs offer a unique blend of healthcare expense management, tax-advantaged contributions, rollover for unused funds, investing for growth, retirement savings, and withdrawals without penalty after age 65.
One requirement is that participants must be enrolled in a high-deductible health plan (HDHP) to adopt and actively contribute to an HSA. However, if the account owner changes healthcare plans later, they can keep the HSA and continue using it for healthcare expenses, investing for growth, and retirement savings.
Partnering with an experienced non-bank HSA custodian (like DataPath and ProsperityHSA) can help banks and credit unions deliver comprehensive financial wellness programs that satisfy consumers. When offered to a financial institution’s business and commercial clients as an employee benefit, such programs can also help strengthen vital client relationships while increasing assets on deposit and building trust with unbanked and underbanked consumers.
Retirement Planning
Retirement planning is another key component of financial wellness. According to the 2022 Survey of Consumer Finances, the average retirement savings for all families is $333,940. That may be enough for some older workers, but Gen X, Millennial, and Gen Z members likely will need to set higher goals to live comfortably in retirement.
Including 401(k), IRAs, or annuities in your financial wellness programs can help people meet long-term goals and increase their loyalty to your institution. Since consumers can only roll over their IRA once every twelve months, they are likelier to stay with a given provider for multiple years, if not a lifetime.
Legacy Planning
Helping people get the most out of their money, whether during their lifetime or planning for future generations, can be a differentiator. Offering estate planning assistance delivers peace of mind for those looking to the future. They need a trusted advisor to help identify their goals and set up a customized plan for long-term success so they can share their earnings with their descendants.
Moreover, setting up these assets could help you land new customers and connect with a younger generation of people, creating lifelines that continue the relationship beyond the original account owner.
Bridging the Gap
With people feeling uncertainty and stress about their financial situations, banks and credit unions can use their financial expertise to bridge the gap. Offering comprehensive financial wellness programs to employers, their workers, and individual consumers can be the key to strengthening customer relationships. Combining education, healthcare expense management, retirement, and estate planning can help financial institutions meet customers where they are in life right now while also creating a long-lasting bond.