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As interest rates continue to rise and inflation remains stubbornly high, it’s no surprise that financial wellbeing levels are at a low point, with just 41% of the UK population feeling positive about their financial situation 1. The need for employers to bolster their employees’ financial resilience is fast becoming a must-have rather than a nice-to-have – and technology can play a vital role in helping them deliver and measure an effective financial wellbeing programme.
The impact of poor financial wellbeing
Poor financial wellbeing can have a ripple effect on employees’ lives – and on businesses. Those worried about money are more likely to experience increased stress, disturbed sleep, and trouble concentrating, which could lead to poor mental health in the long term.
As a result, this can have a detrimental effect on employers. Productivity and performance levels could drop, and absenteeism could rise as a result of poor financial resilience. In fact, research shows
that 28% of employees say money worries have affected their work performance 2. Meanwhile, financial-related absenteeism is costing large organisations an average of £323,390 a year 3.
Conversely, good financial wellbeing can help employers build a more resilient business by reducing employee stress, preventing absenteeism, and boosting performance and productivity. It could also give them a competitive edge over businesses that offer no financial wellbeing support, helping them retain and attract top talent.
It’s clear that supporting employees with their financial wellbeing should take top spot on employers’ agenda. Indeed, research shows that 9 in 10 employers say financial wellbeing is important to them 4. But knowing how to deliver a successful financial wellbeing programme – and measuring its effectiveness – can be a challenge.
The role of technology
There’s no one-size-fits-all financial wellbeing programme. Employees need different support depending on their age, gender, life stage, and financial goals. The impact of financial worry differs too; for instance, someone approaching retirement will have different concerns to someone who’s saving for their first home.
So how can employers build a programme of support that strengthens the financial resilience of every employee?
This is where technology can play a pivotal role. Employers can utilise the opportunities that technology like open finance, artificial intelligence (AI), and big data can bring, such as integration, data sharing, automation, hyper personalisation, and user insights. These can help employers deliver a financial wellbeing programme that’s based on real user interactions, allowing them to tailor it to each employee, track engagement levels, measure effectiveness, and evolve it over time.
Supporting employers with innovative tools
At Standard Life, we’ve partnered with fintech company Moneyhub to create Money Mindset, a tool that helps employers and advisers support members’ financial wellbeing. Using open finance technology, Money Mindset allows members to connect their bank accounts, pensions, mortgages, credit cards, and more into one place, so they can see their money in real time. This gives them greater visibility of their money, helping them get to know their finances and better plan for the future.
Money Mindset also takes advantage of AI to do the heavy lifting of delivering a personalised member experience. Using data from spending activity, the tool automatically sends tailored tips that help members manage their money, helping them feel more in control and, by extension, contributing to their overall financial wellbeing.
Of course, it’s essential for employers to understand if their financial wellbeing programme is working. To support this, Standard Life developed Client Analytics, a member insights tool that uses data and segmentation to track trends in real time. As a result, employers can see which groups are engaging with their pension, and which are lagging behind. Based on these insights, employers can personalise their financial wellbeing support and communications to specific groups, improving relevancy and engagement.
We’re already seeing how technology is making waves in the financial wellbeing space. As the tech advances, employers can feel increasingly confident that they have access to the right tools to deliver a financial wellbeing programme that’s measurable, and based on real life, real time member needs.
Discover more insights and tools on our financial wellbeing hub: standardlife.co.uk/financialwellbeing
