Banks Offering Backup Programs for Financially Stressful Times

Banks and credit institutions exploring creative ways to connect with customers are finding that onsite employee benefit programs anchored in financial wellness prove their worth in deposit growth, wealth services, and more. 

Research shows that an increasing number of lower- to middle-income workers would struggle to cover a $400 emergency. Without savings, many will tap credit cards and carry over balances from month to month, access high-interest nonbank lending, borrow money from retirement savings, or forgo car repairs or medical care. The added worry often impacts job performance and turnover. 

To help, employers are offering workplace banking programs meant to soothe financial stress along with more typical health insurance, vacation, and transit reimbursement benefits. Grocery chain The Fresh Market tapped Truist Bank’s emergency savings program to pilot for its employees, and a year earlier separately implemented an option with SoFi at Work. Among its features, the Truist plan lets participating staff divert a portion of their direct deposit to a liquid emergency fund and receive a partial employer match. 

Taking bank-branded promotions and incentives directly to a store breakroom, factory canteen, or office conference room or providing onsite ATMs and mini branches isn’t brand new. Services today, though, are centered around programming such as financial literacy, savings needs, and wealth creation, and feature convenient mobile tools and apps better designed with the customer in mind.  

Regional and community banks are stepping up their workplace banking response in tempo with larger money centers or credit unions that might have a history of workplace relationships. Meanwhile, the mid-sized to smaller industry segment aims to keep pace with the primary technology and win on service compared to fintechs and direct banks by exploring features such as early payroll access.  

For its part, Truist—which enlisted nonprofit Commonwealth, a partner in BlackRock’s Emergency Savings Initiative, to help implement the emergency savings programs—said it is mining creative ideas because of a competitive landscape for retail deposits. The emergency savings initiative allows the institution to leverage deeper product relationships with early and consistent customer engagement, including onsite meetings. The workplace, Truist banking leaders said, is an untapped channel. 

“By listening to The Fresh Market team members’ needs and showing up with the right solutions, our teammates built trust from the very first conversation,” says Bahari Harris, senior vice president and director of workplace banking and financial empowerment initiatives at Truist.  

Engagement and cross-selling results prove out expectations, Harris adds—95% of one-on-one, in-store meetings resulted in new savings accounts, with $300,000-plus in gross savings deposits; 35% of those meetings led to new checking accounts; and more than half of employees who scheduled a one-on-one meeting booked follow-ups for credit cards, debt consolidation, loans, and mortgages. 

Financial wellness experts who are watching wage earners balance financial needs see these programs performing well across a variety of banks and other companies. 

“Employers want high-impact solutions that address their workers’ concerns and demonstrate a return on investment,” says Nick Maynard, a senior vice president at Commonwealth. “This convergence—high employee need plus employer demand—creates a market gap for banks to modernize the workplace product channel.” 

Industry-wide, workplace models vary by targeting customers along the demographic spectrum. In addition to emergency savings, updated workplace banking services might highlight one-on-one advisory during working hours or aligning with schedules, and providing greater mortgage accessibility, wealth generation, and incentive CD rates.  

Some banks also want to compete with early funds access on payroll direct deposits, which customers desire to avoid overdraft fees when rent or bill due dates hit earlier than payday. The topic certainly features as part of the real-time payments conversation at banks, Alacriti’s Mark Majeske told ProSight’s Frank Devlin on a Banking Strategies podcast. Majeske said consumers can’t always articulate what product they want when it comes to modernized payments features, but they can express their needs, and paycheck flexibility ranks high. 

As for employers, bundled and customized programs for administrative ease are attractive, says Mark Siebold, senior vice president, head of workplace solutions for Chicago-area-based Wintrust Financial.  

Bundled and customized might mean anything from organizing FSA debit card servicing and other employee banking programs under one provider, to creating customized financial literacy videos that address employee questions, to lowering costs to the employer and employees based on a company signing up higher loan and CD volume.  

For companies looking to add top talent to their workforce, offering banking benefits that exceed prevailing market-grade incentive packages can be a sweetener in a tough hiring climate, he adds. 

And perhaps the biggest advantage is the relationship-building beneficial to employees, the company, and the bank. 

“When we say we bring the bank to the workplace, we’re not just bringing the account,” Siebold says. “We’ll offer employees one-on-one time to sit down with a mortgage officer, and we bring in a financial advisor in addition to a wealth strategist; all make appointments, and all are meeting the employee right at their place of work.”