The missing narrative from the wellbeing agenda

It’s increasingly recognised, particularly among the millennial generation, that being ‘well’ is more than just the absence of illness and consequently we need a more holistic approach to health and happiness.

While veganism remains niche, we readily place our faith in superfoods (avocado anyone?). Fitness gurus are Instagram royalty and the rise of adult colouring books has secured mindfulness a place in the mainstream.

There are five universal factors which ‘differentiate a thriving life from one spent suffering’ according to Wellbeing: The Five Essential Elements. Beyond our physical wellbeing, we need satisfaction from how we occupy our time (career wellbeing) and maintain strong relationships both on an individual (social wellbeing) and local level (community wellbeing). The final factor is how our economic lives are managed to reduce stress and provide security (financial wellbeing), which seems a neglected area to me particularly given the threat to our mental health.

In making improvements in any of these spaces, there are multiple behavioural barriers to overcome. Helping people make more positive decisions about physical wellbeing is something we’re very familiar with at 23red through our work with Public Health England. But it’s interesting to consider that health concerns, along with the need to maintain social and community connections and feel purpose in our daily lives, are the basic needs we’ve shared with our ancestors throughout human existence.

Economic lives, however, are a comparatively recent construct and making the best decisions about money doesn’t come naturally. The RSA identified the unique set of ‘behavioural hurdles’ we have to contend with when trying to manage our finances in their ‘Wired for Imprudence’ report.

Importantly financial wellbeing (FWB) isn’t about basic access to financial services or increasing levels of affluence. It’s the ability for people to best manage the money they have: having ‘sufficient control’ to enable people to pay for essentials, have occasional luxuries, service debts, save regularly and have a buffer for those unexpected expenses.

A more customer centric financial sector is championed by the IMF head, Christine Lagarde, who said: “The finance industry is a service industry. It should serve others before it serves itself.” Financial service providers should therefore be driving the FWB agenda and three areas of need can be identified.

1. Ensure customer centric product design

As a bare minimum, financial service providers need to refocus on providing customer centric offerings. Sector innovation has resulted in increasingly complicated financial products predominately designed to generate returns.

The Fairbanking Foundation, a charity encouraging and supporting banking providers to improve customer FWB, launched ‘Fairbanking Marks’ in 2010. Available for current accounts, credit cards, loans and regular savings products, the marks range from three to five stars depending on Fairbanking’s assessment of the level of FWB provided. Customers are empowered to make more informed product choices which are assured to meet their financial needs. 27 products from 15 institutions have now been awarded certification (from just seven in 2010) indicating that real progress is being made.

2. Continuing financial education

Much focus has been placed on children’s financial education and it’s clearly key for future generations. However, financial worries are an ever-present threat to the wellbeing of millions of young adults as we speak. Those with low FWB need essential financial knowledge and skills urgently.

We need educational content which speaks to young people in their language and in their environment. Nationwide adopted this approach in 2014 by partnering with Channel Flip on its Money Stuff YouTube channel.

The other area of opportunity is to support employers in delivering FWB. The importance of employee wellbeing within the workplace is recognised by more and more workplaces but money worries are often overlooked until crisis point. Payroll savings schemes do exist but financial service companies could provide resources to support their business customers in delivering much needed financial education.

3. Facilitating better financial habits

For people to take sustained responsibility for their own finances we need to move from providing knowledge to supporting positive behaviours.

While traditional banks are offering services designed to support increased financial control, it’s the fintech companies who are gaining traction amongst younger demographics.

The popular app-only challenger bank Monzo is designed around increased visibility and control of transactions, providing instant payment notifications and built-in budgeting. The self-dubbed ‘bank of the future’ enjoys high advocacy levels (and a waiting list!).

A new breed of savings apps are also emerging, typified by apps such as Chip and Plum. Working on the ‘change jar’ idea but reinvented for the algorithm age, they monitor spending patterns through read-only access to current accounts. Affordable savings amounts are calculated and money is automatically transferred. Interestingly these products not only offer their users control they also offer market leading interest rates.

It was reported in 2016 that bankers believed restoring public trust in the industry would take a decade. By focusing on the wellbeing of their customers, financial service providers can demonstrate that they are working in their best interests. This will not only help in regaining public trust at a quicker pace but will support the bigger cause of taking care of the nation’s mental health.

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