“Historically the
Financial wellness seminars are not a novel concept, points out Dylan Lerner, senior analyst of digital banking at Javelin Strategy & Research. Many banks and credit unions already host virtual and in-person financial education events, which he finds typically don’t get high adoption. Sometimes they serve more as a marketing tool.
But one trend he has been tracking is financial institutions incorporating financial wellness or money discussions into the branch. For example, the list of reasons to schedule an appointment at a Wells Fargo go beyond opening accounts to “manage spending and saving” “build credit and reduce debt” and “death of a loved one.”
“How can you create that sense of community and remind your customers that we’re not just here to hold your money?” said Lerner.
As an online-only bank, the $193 billion-asset Ally doesn’t have this in-branch option, and must build community in other ways.
The four virtual workshops will each last an hour. They will focus on managing emotions related to money, investigating how early memories relating to money influence present-day tendencies, identifying values relating to money and navigating money decisions in romantic relationships. Howard consulted with people in the fields of behavioral finance, financial therapy and money psychology to develop the curriculum.
Attendance is limited to 50 people because “the topics covered require a level of vulnerability,” said Howard. “We want to be sensitive to creating an environment where people feel safe.” People can choose to leave their cameras off and type in any name they like in the Zoom session. They can opt in for additional communications and resources from Ally. Ally does not promote its own products during the workshops, although its financial education resources are mentioned in workbook materials.
If the demand is overwhelming, Howard may add more classes. Ally declined to say how many people have registered so far.
This program follows a year of pilot classes, held both online and in person. Howard found that some participants participated actively while others listened quietly, and “I respect both,” she said.
She also frequently received follow-up messages where people on the quieter side wanted to relay more of their history with money.
“I have heard everything from ‘I grew up homeless and that impacted my money story’ to ‘my mom was a financial advisor and I have money but I’m afraid to spend it,'” said Howard.
Lerner sees a lot of the workshops center around credit or the 50/30/20 budgeting rule, “the ones that haven’t changed in 20 years,” he said. “But there is also this shift to better understanding behavioral finance.”
To spread the word, Ally erected a “Money Tree” in New York City in August and is running a sweepstakes with cash prizes that match common stress-inducing expenses, such as the annual cost of childcare in the U.S., at $18,900, or $430 for the average monthly credit card payment. Ally has spearheaded a number of creative
It’s uncertain how effective such financial education workshops are, or whether a better solution is out there.
Lerner wonders whether a limited-attendance webinar will move the ball.
“Will it get your customer base to where they are financially? We never want to dismiss these things. We understand from a community perspective,” he said. “But we think there are more optimal ways to deliver those things for your customers.”
Instead, Lerner sees more potential for engaging digital tools on the authenticated site and mobile app such as cash flow analysis, predictive alerts, or debt payoff planning. Lerner has been a loyal Ally customer “since their GMAC days” and finds its savings bucket functionality to be among the best in the industry. But he believes Ally, like many other banks, otherwise lacks a robust suite of financial wellness tools.
He is also surprised as a longtime Ally customer to have not received any notices about these workshops.
“For me, it’s more of a gesture of goodwill to the consumer community and a way to say ‘we care,'” he said.
