By Charles Potts
Let’s face it. We’re not living in our parents’ financial services world. Gone are the days of cashing that paycheck on Friday, heading home to pay the bills, and setting aside a few dollars for savings. In today’s immediate gratification society, our concern lies more with what’s in our account this second than where it will be next week.
Look no further than the Federal Reserve Board’s most recent Household Economics and Decisionmaking survey, which finds 39 percent of Americans would not be able to cover an unexpected $400 expense without borrowing or selling something.
And as we look to future generations, the need for financial management also seems apparent. More than half (57 percent) of Generation Z— or Centennials — have no idea how much they have in personal savings, and 69 percent report they are unsure how to balance spending and saving, according to a study from Northwestern Mutual.
This deficiency in financial prowess opens doors for new opportunities. With our relationship-based approach, who better to help solve this conundrum than community banks?
That’s why financial literacy and education will continue to be a key trend to watch for community banks. As Kevin Tweddle, ICBA senior executive vice president of community bank solutions, predicted earlier this year, we will witness the growth of financial well-being tools. And, as we watch that trend unfold, we’ll see that today’s digital-first consumer expects technological solutions—like the ones offered by our ThinkTECH Accelerator participants.
For example, in the financial well-being space, Wallit offers community banks a smart digital wallet solution. Through an app, Wallit links community banks, local retailers and consumers in a closed-loop network.
Within this connected community, consumers can automatically see what bills are coming due for a current pay period along with an actual amount of their account balance that is available. Then consumers can get rewarded for achieving their savings goals and earn local-area discounts and deals as targeted cash-back offers.
Through a hyper-local marketing program that delivers merchant-funded cash-back offers tied to the community bank’s debit cards Wallit creates a new way to address the age-old problem of balancing spending and saving, says Founder and CEO Mike Vien
"I think technology has come along that has really leveled the playing field,” says Jack Hartings, chairman of The People’s Bank Co., a $500-million-asset bank in Coldwater, Ohio, and an Accelerator mentor this year. “We have to innovate to bring a better customer experience, and it's exciting technology that allows us to do that. That's what this Accelerator is all about."
And we see the Accelerator continuing to support this topic. With 88 percent of employees saying they want help with their personal finances, this guide-customers’-financial-journey-with-smart-technology approach will open new doors for community banks.
Because, while this may not be your father’s banking experience, the relationships community banks create with their customers remain true to those roots, and when it comes to financial well-being, technology can help deepen those connections.
For more information on Wallit and ThinkTECH Accelerator participants, please join us at the ICBA LIVE ThinkTECH Showcase.
Charles Potts is ICBA senior vice president and chief innovation officer.