Financial Wellbeing — Placing your people at the heart of the organisation

Financial wellbeing

In the UK, ‘Financial Wellbeing’ is becoming a core pillar within strategies run by organisations to support the physical and mental health of their employees and consumers. Financial services and corporate organisations play a crucial role in their customers and employees’ lives. In a survey by YouGov of 1,817 working adults across all industrial sectors, the findings revealed that financial wellbeing not only affects individual workers but it also impacts business performance. One in four workers report money worries have affected their ability to do their job, one in ten say they have found it hard to concentrate/make decisions at work because of money worries and 19% have lost sleep worrying about money — all of which impact productivity.

The Money and Mental Health Policy Institute note that a period of poor mental health can have a long lasting impact on a person’s finances, leaving them with depleted savings, in problem debt or with a damaged credit rating. All of this can contribute to financial exclusion or can lead people to self-exclude, wanting to avoid similar difficulties in the future.

However, there is a light at the end of the financial tunnel. Research by the Social Market Foundation in 2016 revealed that there has been a 150% increase in the number of employers considering the introduction of a financial wellbeing programme during the last three years. In addition to that, “the number of employers offering this type of programme has risen by 75%.” Employers are quickly making the connection between financially secure employees and a happy, productive workforce. Providing a company pension is no longer viewed as sufficient — employees expect well-regarded organisations to provide other financial benefits such as discount codes or contributions towards travel to work schemes. In short, 2017 businesses need to be not only customer-centric, but employee-centric too.

Case study: Momentum UK

‘Financial Wellness’ is a core philosophy for Momentum (MMI Holdings), the investment and wealth management company, which is headquartered in South Africa and operated globally. Dominic Baliszewski, Director of Consumer Strategy at Momentum UK explains Financial Wellness is at the heart of everything we do. We partnered with the University of Bristol to launch the UK’s first Financial Wellness Index, a true state of the nation when it comes to understand the Financial Wellness of UK households.” Helping people improve their Financial Wellness is really important to Momentum and its teams across the world, and therefore it is rooted within the foundations of the company.

Digital banking in the UK is significant with 11 million people logging into their banking apps every day, according to a report by the British Bankers’ Association in 2015.

The Financial Wellness Index revealed that people who aren’t digitally connected are considerably less financially well than those who are. For example, when participants were asked if they knew how much they had in their bank account, just 1% of those who used the internet as their main method of banking had ‘no idea’, compared to 9% of those who primarily banked over the phone.

Similarly, 18% of the research respondents who banked over the phone admitted to ‘often’ or ‘always’ missing the minimum repayments on credit agreements, compared to just 5% whose preferred method of banking was on an app. These statistics are encouraging in terms of digital engagement, but the wider question that still needed to be addressed was, do people really understand their entire financial world?

The Momentum UK team identified that Financial Wellness was a fairly unknown term here and there was relative cynicism towards such a ‘holistic’ view of people’s finances. However, they felt that consumers weren’t seeing their full financial picture and needed both more control and better understanding of their money and investments.

Due to the current UK banking ecosystem, consumers have one app per financial product which provides a disjointed view of all their money. To solve this problem for consumers, Momentum UK partnered with Moneyhub Enterprise, the developers of financial technology tools, to provide their customers and employees with access to a personal finance money management app that allows them to see all of their finances in one place. In 2018, following the implementation of the new “Payment Services Directive 2” legislation, their customers will be able to use their Moneyhub app to move finances from one bank account to another too.

On top of the practical digital support for Momentum UK’s customers through the Moneyhub app, Baliszewski and his team have built a “Financial Wellness tool” to further encourage their customers and employees to look at their finances and understand their own individual financial behaviours.

Baliszewski says, “People might know how much they earn but they don’t actually know how financially well they are — for example, many don’t know how they would cope if they had to face a financial shock, like suddenly losing their jobs. Our Financial Wellness tool aims to help people understand their entire financial situation looking at everything from short and long term planning to savings, managing debt, their access to financial products and more.

The Financial Wellness tool was developed in-house at Momentum UK and was launched in conjunction with a comprehensive report by the University of Bristol in 2016, disclosing for the first time how financially well the UK is. It enables Momentum UK customers to compare their financial results with national data to see how they score, as well as providing insight into how they can improve their situation.

Momentum UK's Financial Wellness tool's wellbot

Momentum UK's Financial Wellness tool's wellbot

Momentum UK uses both the Moneyhub app and the Financial Wellness tool to help its customers and employees improve their financial wellbeing. Interestingly, the company has seen a cross-pollination from customers using the Financial Wellness tool and the Moneyhub app, which are both individual entities, but which work seamlessly as part of the same customer journey. This indicates that consumers who are actively engaging with their finances are proactively using a few different tools to provide financial enlightenment:

Financial enlightenment diagram

Baliszewski concludes about the Financial Wellness campaign, “We set ourselves a target of the number of people we wanted to engage with — both internally and externally — through our Financial Wellness tool and report. We hit our target three weeks ahead of schedule. This illustrates to us that there is a real appetite for information around Financial Wellness.

“We know that our vision of ‘enhancing the lifetime Financial Wellness of people, communities and their businesses’ is something that our team feels very proud of, and it also has the desired knock-on effect on them — our staff actively engage in their finances, and continuously consider different financial products which will support them achieve their long term goals."

From a business and productivity perspective, financial wellbeing programmes tick all the right boxes, and so the final piece of the jigsaw comes down to basic human instinct. What is the ethical position on this? As the predominant source of income for many workers, employers now want to provide financial support because it’s the right thing to do.

But it’s a responsibility that should be felt across entire organisations, not just by the decision makers, and weaved into existing wellbeing policies. HR teams and line managers need to have the relevant support and resources in place to be able to implement an appropriate strategy. And different employees will have different needs — some may appreciate participating in a training course around financial education, while other employees might benefit from having a money management tool.

Research undertaken by Willis Towers Watson in 2016 suggests that “more staff than ever before are interested in obtaining access to advice and guidance from their employers about financial issues." With both employers and employees seeing the benefits of financial wellbeing policies and tools, now is the time for businesses to act upon this meeting of minds and help future proof the long term happiness and productivity of their workforces.

Written by Rhian Adams, PR and Communications Manager at Moneyhub Enterprise

Find out more about Moneyhub Enterprise at / @moneyhubenterpr