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Cornering Workplace Financial Wellness

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Find out how financial services firms can capitalize on a multi-billion-dollar market opportunity with well-designed, holistic workplace financial wellness programs.

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Cornering Workplace Financial Wellness

  1. 1. CORNERING WORKPLACE FINANCIAL WELLNESS Designingemployee programsthatwork
  2. 2. Workplace financial wellness programs have not generally been well—with limited employee uptake and low sustained usage. The Rx? Well-designed, holistic, scalable programs that combine the best of design thinking and digital technology. The opportunity for financial providers is now, in a multi-billion-dollar market that has no clear leader as of yet. 2 CORNERING WORKPLACE FINANCIAL WELLNESS
  3. 3. Historically, as employees’ needs changed, companies simply layered additional benefits onto existing plans. Given the comparatively homogeneous employee profile (male, married with children, retiring with a gold watch after many years of service), this approach fit the need. While neither appealing nor innovative, a one-size- fits-all model worked. But it doesn’t anymore. Today’s diverse workforce ranges widely, from age and gender, to marital status and life goals. In a globally competitive business environment, companies depend on their workforces more than ever to be productive, innovative and on task. While those traits may not be intuitively linked to employees’ financial health, companies have learned they are intertwined in a way that impacts business performance significantly. A recent study shows a company with 50,000 employees can save from $33 million to $49 million annually by increasing the financial wellness score of its workforce by just one point (on a 10-point scale). Two points reaps $65 million to $97 million in savings.1 Conversely, employers who don’t tackle the issue could risk up to $250 billion in lost wages due to employees’ stress about their personal finances. Employees report spending approximately 150 work hours annually—almost four weeks of work time—worrying about money.2 Employers’ enlightenment could be financial firms’ gain. Eight out of 10 employers now offer a financial wellness program, up from just two out of 10 in 2015.3 But they seem to need help with uptake and sustained use, as only 31% of employees participate in them.4 Financial services firms who can capitalize on this growing opportunity with well-designed, holistic offerings may corner a market that has no clear owner. But they must act fast. If you’re a wealth management firm looking for a complementary adjacent business, a life insurer looking at the opportunity to help consumers understand their value proposition, a fintech player whose sweet spot could be helping group benefits carriers create cutting edge capabilities—the time to act is now, before the market could become oversaturated. Eight out of 10 employers offer financial wellness programs3 designed to improve employees’ financial health, but only 31% of employees participate in them.4 3CORNERING WORKPLACE FINANCIAL WELLNESS
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  5. 5. Designthinking, fromstrategy throughexecution Holistic offerings created with design thinking are de rigueur for the real competitors in this market. It’s not enough to address piecemeal aspects with solo programs like retirement saving and budgeting. A holistic approach helps employees organize their financial “junk drawer,” drawing connections between various elements of financial health—from preparing a will, to saving for a home, to managing credit card debt (and everything in between). It moves beyond the expected into a service that recognizes finances touch on just about every aspect of employees’ lives—from children, to aging parents, to education and a home. Putting employees and employers at the heart of a holistic offering—from design through execution—is key to success. The research proves design thinking is worth the effort; design-led companies outperformed the S&P 500 stock index by 211 percent over a recent 10-year period.5 To create guided, specific, tailored offerings by employee profile, financial firms need to involve end users in the process. Targeted outcomes depend on it. They cannot rely on employer input alone, as evidenced by Bank of America Merrill Lynch’s 2018 Workplace Benefits Report. When asked what would help improve employee financial wellness the most, employees wanted practical guidance that would “focus on the single next thing to do—one step at a time.” By contrast, employers said the top item to improve workers’ financial wellness would be: “considering the impact of employer benefits on overall personal finances.”6 THEROADTOA WELL-DESIGNED, MODERNOFFERING Wealth managers, insurance companies, fintechs and other financial firms will need to get a few things right as they design their approach. Moving quickly is key, but not at the cost of a comprehensive strategy. A well-designed, modern offering will ultimately move employees from financial literacy to financial empowerment—giving them the tools, information and customer experience that create sustained behavior change in their financial lives. 5CORNERING WORKPLACE FINANCIAL WELLNESS
  6. 6. Using design thinking could help your firm avoid the disconnect between employees’ and employers’ views of what is needed. Good design thinking could ensure your firm’s offerings demystify and encourage financial wellness, rather than cause analysis paralysis due to a bevy of untailored information. Firms that really want to move the needle will ensure their financial wellness program encompasses a user’s context. For many employees, an experience tailored for them must take into account the financial demands of a larger network—their family. By doing due diligence upfront, firms can design offerings that could help improve more than just an individual employee’s stress about finances; they could also improve quality of life for the entire family. Source: Accenture WALKINGINSOMEONEELSE’SSHOES Using design thinking helps companies frame up employee financial wellness programs designed with users for users—which increases the chance of uptake and sustained usage. BUSINESS VIABILITY DESIGN THINKING TECHNOLOGY FEASIBILITY HUMAN DESIRABILITY It’s about thinking through all the tangible and intangible things that make for a positive experience for people and addressing the business and technology elements needed to deliver them well. 6 CORNERING WORKPLACE FINANCIAL WELLNESS
  7. 7. Digitally-fueled personalization New technologies can help differentiate between types and categories of employees. Corporate programs can and should personalize for life events and stages. And today’s technologies take it to the next level: hyper-relevance. Using data-fueled predictive analytics, companies can offer individual employees a financial wellness customer experience tailored for their needs—hitting the right touchpoints at the times that will most likely foster uptake and action. Digital technologies like artificial intelligence (AI) and analytics are the only route to the level of personalization employees expect, at the scale and competitive pricing companies desire. For instance, an employee making $40,000 per year with minimal health insurance and huge debt will likely not respond to content about saving for an expensive home. But the up- and-coming, recently married, young executive expecting a baby probably will. Use employee demographics and data to determine not just what to offer employee segments, but in what order and prioritization. Advanced analytics and AI can identify employee needs and patterns of behavior, presenting the right information at the right time to maximize the chances of behavior change. And, they do so with speed, scale and cost efficiencies not possible without them. To be truly competitive in this market, companies need to infuse digital strategically throughout their offering. 7CORNERING WORKPLACE FINANCIAL WELLNESS
  8. 8. Acompelling, category-breaking customerexperience Over the past several years, the number of interactive, on-demand financial wellness apps has skyrocketed. Employees and employers have more choices than ever. While this sounds like an ideal scenario, it can muddy the waters for companies that have a less-than-firm grasp on their employee- experience goals for financial wellness. Upper management increasingly looks for a return on investment (ROI) in this area—from improved retirement readiness to greater workforce productivity. But, to get to that ROI, the financial-wellness, corporate-user experience needs to be simplified and personalized. The current patchwork quilt of financial wellness apps and programs doesn’t provide for that. Simply creating a digital platform with reams of content will not move the needle. Using the principles of behavioral finance, companies need to cover every element of finances in a holistic way, but offer information in logically sequenced, digestible chunks. Given that employees want to focus on the “next best thing” to do—change via a series of incremental tasks that don’t overwhelm them—a good customer experience allows for that. A great customer experience goes one step further, building on employee momentum and showing milestones that indicate progress, encouraging continued positive behavior change. Successful programs will educate employees to make the best choices in a stair-step approach, rather than pitch products. To foster this, companies must give up the archaic service website and anonymous contact center. Success in this space is now measured in outcomes. Advisors need to flip the framework they’ve traditionally operated in to be truly effective. Success is no longer who put how many shares in a plan, but rather, how many employees have made strides to take care of their family’s financial wellness. To get to that goal, firms will need to offer a seamless, consistent, tailored customer experience across all channels—from advisors, to website, to call center. Employing a host of techniques and options—from gamification to self-service, responsive feedback options to data-fueled personalization—firms will need to consumerize employee financial wellness so they perform on par with what employees expect based on their financial experiences outside of work. Success is no longer who put how many shares in a plan, but rather, how many employees have made strides to take care of their family’s financial wellness. 8 CORNERING WORKPLACE FINANCIAL WELLNESS
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  11. 11. MAKINGYOURMOVE Playtoyourlegacystrengthinyour marketstrategy. Most firms are not starting from scratch, so begin with your best suit. If your core capability is product, complement it and expand upon it to design solid products to back up your education efforts. If it is advice, build on advice. If it’s inexpensive distribution, determine which services differentiate your company from a basic administrator and add them. Your jumping-off point should already be an area of strength. Ecosystemsaddrichness, whendoneright. Non-traditional partnerships and competitors are proliferating in this space. For example, Prudential launched a $5 million partnership with the Aspen Institute think tank in 2017. The organizations are working together to create new financial tools for workers and a financial wellness program roadmap for companies.7 Payroll company ADP is partnering with SmartDollar to offer an online, app-based financial wellness employee program that covers everything from getting out of debt to saving for emergencies and retirement.8 Many of the newer programs emphasize bite-sized steps to increase the chances of lasting behavioral change in employees. Workwithatrustedpartner. Employee financial wellness is a market niche that is changing quickly. Work with a partner who spans the core competencies and ecosystem players, and has experience developing and implementing market strategies in this space. It will save you countless headaches along the road and can leapfrog you ahead of competitors who may have been early entrants. Making your move in a multi-billion- dollar market is no small undertaking. But, employee financial wellness is a noble cause and represents a market ripe for the taking. Making your move now could help ensure your firm is not locked out of lucrative future opportunities in this arena. To enter this market in earnest and take advantage of a limited window of opportunity, firms will need to move quickly. A few things to keep in mind as you think about moving forward: 11CORNERING WORKPLACE FINANCIAL WELLNESS
  12. 12. Copyright © 2019 Accenture. All rights reserved. Accenture and its logo are trademarks of Accenture. 190411 FOR MORE INFORMATION Kendra Thompson Managing Director – Capital Markets, Wealth Management Lead, North America kendra.thompson@accenture.com Robert Sollmann Director – Insurance robert.sollmann@accenture.com STAY CONNECTED Twitter @AccentureCapMkt LinkedIn www.linkedin.com/showcase/ accenture_capital_markets/ www.accenture.com/wealth ABOUT ACCENTURE Accenture is a leading global professional services company, providing a broad range of services and solutions in strategy, consulting, digital, technology and operations. Combining unmatched experience and specialized skills across more than 40 industries and all business functions— underpinned by the world’s largest delivery network—Accenture works at the intersection of business and technology to help clients improve their performance and create sustainable value for their stakeholders. With 477,000 people serving clients in more than 120 countries, Accenture drives innovation to improve the way the world works and lives. Visit us at www.accenture.com. REFERENCES 1. https://www.pionline.com/article/20181115/ ONLINE/181119901/financial-wellness- programs-can-boost-cost-savings-report# 2. https://www.mercer.com/newsroom/ financial-stress-could-cost-us-employers- up-to-250-billion-in-lost-wages-annually- finds-new-mercer-survey.html 3. http://news.prudential.com/financial- wellness-program-popularity-rises-among- employers-up-63-percentage-points-in- two-years.htm 4. https://www.forbes.com/sites/ nextavenue/2018/08/01/why-workplace- financial-wellness-programs-arent- well/#66a8832258f2 5. https://www.dmi.org/ page/2015DVIandOTW/2015-dmiDesign- Value-Index-Results-and-Commentary.htm 6. https://www.forbes.com/sites/ nextavenue/2018/08/01/why-workplace- financial-wellness-programs-arent- well/#a76d5f658f2 7. http://news.prudential.com/prudential- financial-wellness.htm 8. https://apps.adp.com/apps/205212/ smartdollar---financial-wellness-for- adp-vantage-hcm#!overview DISCLAIMER This document is produced by consultants at Accenture as general guidance. It is not intended to provide specific advice on your circumstances. If you require advice or further details on any matters referred to, please contact your Accenture representative. This document makes descriptive reference to trademarks that may be owned by others. The use of such trademarks herein is not an assertion of ownership of such trademarks by Accenture and is not intended to represent or imply the existence of an association between Accenture and the lawful owners of such trademarks.

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