So much of work wellness is tied to financial wellness. It’s what led Branch to expand our platform to add Pay and continue to develop new ways to improve the lives of hourly workers.
As part of that ongoing process, we came across the Center for Financial Services Innovation (CFSI), a non-profit and leading authority in focused on consumer financial health. Working with some of the largest and fastest growing financial institutions in the world, CFSI features a network of committed financial services innovators to build better consumer products and practices -- including solutions for the workplace.
We sat down with CFSI’s Senior Director, Beth Brockland, who leads CFSI’s strategy for financial health in the workplace, to talk about her experiences in increasing opportunities for underserved communities, workplace wellness programs, and what she thinks are the biggest financial challenges hourly workers are facing.
How did you arrive at CFSI?
I spent the early part of my career working with nonprofits that promote political and economic opportunities for communities in the U.S. and abroad. I then decided to go back to school and pursue an MBA because I saw the potential of using business as a tool to improve people’s lives. For me, CFSI was a perfect marriage of a strong social mission (financial health for all) and a commitment to working with private sector companies, along with nonprofits and government leaders, to advance our shared goals.
At CFSI, you handle workplace wellness programs. Can you explain what that is and why that’s an important mission today?
CFSI is focused on financial health in the workplace because employers have an important role to play in supporting their employees’ financial health. In addition to traditional benefits like retirement accounts that help with long-term saving and planning, employers can offer workplace benefits that help people manage their short-term financial needs like budgeting and managing expenses, saving for emergencies, and managing their debt. Our research shows that employees are struggling financially and looking to their employers for help, but most employers today still don’t offer benefits that help employees with these critical short-term needs.
What do you think is the biggest challenge for today’s workers (hourly / non-professionals if possible) in managing their finances and saving for the future?
Unpredictable schedules and income volatility make it very hard for hourly workers to manage their finances and put money aside for the future. In a recent survey of 6,000 retail and fast-food workers by The Aspen Institute, half of workers reported that their income varied week-to-week, with a typical swing of 34% between the lowest and highest-earning weeks. Another study by The Pew Charitable Trusts found that families with volatile incomes are less likely to say that their household could come up with $2,000 for an unexpected need. Not being able to predict how much money is coming in week-to-week or month-to-month can make planning and saving much more challenging for workers.
There are a lot of voices (and products) out there that propose to help people plan and manage their finances. For an hourly or frontline worker, what are your best recommendations for getting on the right foot?
A great first step for workers is to see what their employers offer in terms of benefits that can help them with their financial health. This might be a retirement savings account with an employer match or flexible spending accounts that workers can use to save for health or child care expenses on a pre-tax basis. Some employers are now starting to offer other types of benefits such as help paying back student loans or saving for emergencies. Outside of the employer context, there are a lot of great apps out there that make it easy to save, like Digit, or help people manage their debt, like LendStreet. CFSI invests in a number of these new products through our Financial Solutions Lab, which is focused this year on working with startups offering employer-based solutions.
The way we get paid is changing really fast! Do you have any thoughts on how this area is changing and how it is positively impacting the hourly and frontline workers?
One trend we think is really encouraging is the growing number of products that help people access the pay they’ve already earned without having to wait for their next paycheck. Managing your finances is complicated when payday only comes every two weeks but bills are due today. These have the potential to put a lot more control in workers’ hands and to help them avoid having to seek out other, much more expensive forms of short-term liquidity like payday loans.
Are there any people in this space whom you follow and really respect right now?
I think the research that The Aspen Institute is doing around income volatility and the need for more portable workplace benefits in light of the changing nature of our workforce is really important. JPMorgan Chase is also doing great research on the ups and downs in people’s income and expenses, as well as on the size and nature of the gig economy, by analyzing hundreds of thousands of anonymized account records.
In terms of market innovations, I’m encouraged to see major insurance and retirement players like Prudential and Fidelity starting to offer short-term savings and student loan repayment benefits to their employer clients. I’m also excited to see startups like MedPut and Alice, both of whom are part of CFSI’s Financial Solutions Lab, create really innovative approaches to tough problems like medical debt and simplifying pre-tax spending for workers.
To learn more about Beth’s work and other great CFSI initiatives, visit https://cfsinnovation.org/ or attend their annual conference EMERGE May 14-15, 2019 in Scottsdale, AZ. You may cross paths with our very own Head of Product Ahmed Siddiqui!
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