Workplace banking can boost financial wellness for low-income employees, study finds

Employers have an opportunity to help improve access to banking for minority employees and those with low or moderate incomes, new research from Commonwealth, supported by Wells Fargo, found.

“The workplace is a promising channel to expand access to banking and financial wellness for un- and underbanked workers, who are disproportionately Black, Latinx and American Indian or Alaskan Native households, and those living on low incomes,” Commonwealth Director Charvi Gandotra said.

The research produced several key takeaways:

• The workplace presents a bankable moment to advance financial wellness. Employees look to employers to support their financial wellness needs. Each payday offers an opportunity for active engagement with workers, including the ability to automate decisions, making it a powerful moment to advance financial access.
• Demand for workplace financial wellness solutions is growing. Worker financial wellness is a top concern for both companies and their workers. There is a growing recognition of the business case of worker financial security in hiring, talent retention and productivity.
• Financial institutions have an opportunity to meet unmet financial wellness needs. Growing employer demand has led to a supply-side response, with a range of providers offering different financial wellness benefits. Research and industry partnerships show that employers who are considering adding these benefits typically find it easier to partner with their current vendors.
• Financial institutions have choices in how they operate. Financial wellness-focused workplace banking programs have taken on many forms, from holistic banking solutions to partnerships with fintechs and recordkeepers to actionable financial insights.
• Effective operation in the workplace requires acting as a benefits provider. This means recognizing that providers should meet the needs of two critical stakeholder groups — employers and workers.
• Employers want sophisticated benefits providers. Benefits leaders are solving for their employees’ financial wellness, not banking access and inclusion.
• Worker needs must be central to program design. Financial inclusion and wellness for many of the millions of U.S. households that lack access to quality banking will depend on solving issues of accessibility and trust, and providing meaningful value.

Read more: Financial wellness is a necessity for employers to offer: Here’s why

“In a crowded vendor landscape, banks and financial institutions have a unique opportunity to meet unmet financial wellness needs and must operate as a benefits provider to be effective in the workplace,” Gandotra said. “This research provides key design insights for banks and other providers around developing high-quality financial wellness solutions for the workplace.”