Personal financial wellness programs are on the rise and banks are no exception in offering them to employees. Now some are taking the next natural step and turning the perks developed for their employees into a new type of business service.
A financial wellness program popular internally at SunTrust Banks is proving to be a hit with its corporate customers.
For three years now, the program, called Momentum onUp, has been helping SunTrust employees achieve their financial goals through a combination of on-site coaching sessions and online tools.
Last January, Atlanta-based SunTrust extended the program to corporate customers, as a benefit they could offer to their own employees. To date, 68 companies have enrolled in the program and, of those, 50 have launched it.
The $84.3 billion-asset First Republic Bank in San Francisco took a similar approach with Gradifi. Gradifi administers student debt assistance as an employee benefit, an increasingly popular perk for cultivating loyalty with notoriously fickle (and debt-laden) millennial workers.
After trying out the program with its own employees, First Republic bought the startup in late 2016 and began offering the service to its corporate customers.
Banks’ interest in personal financial wellness makes sense. The shift in consumer behavior, away from physical branches and toward self-serve digital channels, has pushed banks to take a more advisory role with customers.
At the same time, increased individual responsibility for health care expenses and retirement planning means that Americans’ financial lives are more complex than ever, said Mark Schwanhausser, director of digital banking with Javelin Strategy & Research.
Against this backdrop, banks are uniquely qualified to fill a role as financial coaches, helping their own employees, their customers and their corporate customers’ employees to better navigate their own financial lives.
It also makes sense that, when thinking about how to engage customers, banks should be able to apply what they’ve learned by offering these services to their own employees.
“The tools that a bank develops for its employees may be the kinds of tools you can develop for your customers, or vice versa,” Schwanhausser said. “What you’re doing inside your HR plan probably has some relevance to your consumers because it’s all about trying to use a digital channel to create a sense of ‘What do I do next?’ ”
Though Gradifi is expected to lose money for at least a couple of years, First Republic wants to invest in scaling it up, Chairman and Chief Executive James Herbert said in the third-quarter earnings call. The thinking is that it can lure high-earning millennials to First Republic, both as employees and as customers.
At the $208 billion-asset SunTrust, acquisition and retention — not profit — are the end goals for now. SunTrust charges participating companies only for the cost of delivering the program, with no premium on top of that.
Like First Republic, SunTrust came by its financial wellness program through an acquisition.
Brian Ford is a financial well-being executive at SunTrust. But before he joined, Ford was the founder of 8 Pillars, where he developed personal financial wellness programs for workplaces.
SunTrust worked with Ford’s company to develop a financial wellness program for its employees and ultimately liked the results so much it bought 8 Pillars in September 2015; Ford now runs the bank's external program.
“Speaking broadly, it’s been fascinating to watch this workplace financial wellness space evolve because 10 years ago, the term ‘workplace financial wellness’ really didn’t exist,” said Ford. “It was slow at first, but it’s really gained steam in the last five years. It’s pretty difficult to become a best place to work or an employer of choice without having a fairly robust workplace financial wellness program.”
The details of the SunTrust program vary according to a company’s particular needs and the needs of its employees. A program tailored for Waffle House employees, who don’t sit at a desk all day, might take place entirely online, while a smaller company with one central location might choose to offer it on site.
Momentum onUp’s curriculum revolves around eight core concepts, or pillars. These are designed to help people organize their financial lives and establish priorities. Creating an emergency fund is the first step, but the course also covers topics like improving credit scores and investing.
Just listening to the videos and doing the exercises would take a person two or three hours. But following through and actually doing everything the program asks of participants could take one to six months. SunTrust said it encourages users to think of the program as a resource they can use over several years.
More than 16,000 of SunTrust’s 24,000 employees have participated in its financial wellness program, and anonymous survey results have been encouraging, Ford said.
The participants reported greater progress toward their financial goals and less financial stress, he said. Importantly, they reported greater confidence in their careers at SunTrust and said they felt the bank cared about them.
SunTrust also has experienced significantly lower turnover among employees who have gone through the program compared with those who haven’t.
In offering this program to corporate customers, Ford said that SunTrust wants to give those companies a similar win. In the end, it is also a win for the bank that introduced the company to the program.
The gratitude that accrues to employers can be substantial, Ford said.
“We’ve had employees tell us that we’ve saved their marriage,” he said. “People have said this is the best class they’ve ever taken.”