KeyBank customers have a new way to track their financial health: the Cleveland bank will be publishing scores meant to show them how they are doing financially and how they stack up to their peer groups.
The new stats, which are not credit scores, are a result of KeyBank's new exclusive partnership with HelloWallet, a provider of guidance on personal financial matters.
The firm, which was founded in 2009 in Washington, D.C., and acquired by research firm Morningstar in 2014, crunches customers' financial data to spit out a score of up to a 100 and offer consumers advice on how to improve their scores. HelloWallet sells its software to employers as a perk, and KeyBank is its first bank partner.
KeyBank online and mobile customers will gradually be invited to test the new services by filling out a three-minute survey through HelloWallet and connecting with a bank adviser. The questions include answering things like whether they pay off their credit cards bills or how much they have in savings. Phase two of the project, expected to hit later this year, will integrate the scores and financial guidance insights into KeyBank's mobile and online banking experience.
The $94 billion-asset unit of KeyCorp, which got attention for its edgy cash flow forecast app in 2013, partnered with HelloWallet to help people track how they are doing and why as well as offer insights into how to make improvements. Beyond the new scores, the partnership also marks another first for KeyBank: its customers can incorporate their financial data from other bank accounts to feed the algorithm.
The new initiative speaks to the industrywide story of increasingly needing to deliver
such information digitally instead of in conversations at branches. KeyBank says its customers are twice as likely to visit online or mobile banking than a branch on any given day.
"One thing you can count on: branch transactions are declining," said Dennis Devine, co-president of KeyBank's community banking, consumer and small-business operations.
Sure, banks have offered personal financial management services online, but a financial health score is a new wrinkle. Newer firms like Flexscore have promoted the idea, but banks have yet to embrace the approach except with some issuers now publishing free credit scores.
Mark Schwanhausser, director of omnichannel financial services at Javelin Strategy & Research, said the announcement underscores how the industry is working to make a tighter connection between what customers do in their deposit accounts and how they swipe their plastic.
"Look for more banks and credit unions to move in the direction of providing some kind of score," Schwanhausser said in an email. "It's eye-catching, it's ever-changing, and it invites engagement and triggers curiosity about how one could improve the score."
Devine describes the financial health score as the banking equivalent of the widespread trend of people clocking in their steps via a wearable device to help them achieve their fitness goals.
It also provides a conversation starter. The vision, after all, is the bank will be privy to the number regardless of the channel the consumer is using and can make the data a starting point for broader financial conversations.
The debut comes as rivals are providing free credit scores to their customers in addition to educational tools meant to explain the scorers at a time when the Consumer Financial Protection Bureau has strongly encouraged issuers to do so.
KeyBank, which does not offer free credit scores, sees HelloWallet as something that goes deeper. The service, for example, could show customers they are spending too much relative to their incomes or that their credit card balances are too high or they need to bump up savings for their health coverage as they have high deductibles.
"It's not a list of accounts and balances but a perspective of how are you doing," Devine said.
The tech initiative is addressing a problem the bank discovered after surveying 1,800 consumers in 2013. The survey found 70% of respondents said saving for the future ranked as their top financial goal, while 72% said they were not confident in their abilities to save for the future.
"It is not a solution we were hoping to find a need for," Devine said. "[It] started with a need we saw with our clients."
The experience, of course, first demands people to supply data in the three-minute surveys.
Matt Fellowes, founder of HelloWallet and Morningstar's chief innovation officer, said its software is tweaked every 30 days.
"Where we have started is not where we will end," Fellowes said. The first phase is meant to better understand financial behaviors that need to change, while the second phase is designed to help cultivate certain behaviors.
"Changing behavior is really hard," Fellowes said. "You can't do that with a survey."
HelloWallet will be working with KeyBank in the months to come to understand what motivates people.
Jacob Jegher, a research director at Celent, said delivering a bad score would require finessing to prevent people from getting overwhelmed and feeling defeated. The way steps are outlined to improve the score will also influence the service's utility, he said.
Fellowes said the experience will begin with simpler goals like building an emergency savings fund instead of harder challenges like spending less than one's income.
"We focus on the small wins initially," Fellowes said.
The frequency of interactions depends on where someone is on the financial ladder - some may need weekly or monthly interactions while others may not. The technology can accommodate both, Fellowes said.
KeyBank, meanwhile, has been training employees like branch personnel so they can be ready to answer customer questions.
"Online banking has been lists of accounts and balances," Devine said. "Any bank can provide that."