Money worries? Help is on the way.
REDUCING FINANCIAL STRESS—AND HOW TECH CAN ACHIEVE THAT—WAS A TOPIC THAT CAPTURED AUDIENCES’ ATTENTION AT A RECENT FAST COMPANY PANEL
Americans are stressed out. That was the conclusion Suntrust reached three years ago when conducting research on financial stress in the U.S. “Eighty percent of Americans lie awake at night [due to] financial stress,” Ken Meyer, Suntrust’s chief technology officer for consumer banking, told the audience at a Fast Company panel sponsored by the Atlanta-based bank in March. “Roughly 40% of Americans don’t have $2,000 in emergency savings. That number grows to 60% with Millennials.” Such insights inspired Suntrust to create onup (onward and upward), an initiative to bolster consumers’ financial confidence through tips, tools, and community on onup.com. The panelists discussed how technology—particularly Ai—could be enlisted to help reduce our financial worries. Ed Doran, head of product development at Microsoft Research, which devises technological solutions to complex global problems, believes that inefficient data screening tools need to be fixed. He estimates that some 40 million Americans can’t get credit because of gaps in their data profile or inefficient algorithms. Once rejected, customers might be permanently shut out of the credit system. Microsoft Research is working with Zest Finance to create more powerful screening AI to resurface viable applicants.
IT STARTS WITH EDUCATION
In other cases, customers simply are unable to benefit from bank offerings specifically designed to create peace of mind, such as retirement accounts. The founder and CEO of Honest Dollar, who goes by the mononym Whurley, created a way for small companies to offer retirement savings plans. At Honest Dollar, a Lyft driver or a barista could open a retirement account for a dollar, unlike the minimum-savings amount required at other banks. Honest Dollar also stopped penalizing people for withdrawing money from their accounts for emergencies. Most significantly, Honest Dollar educated customers to make them better understand their financial status. “We got teased in the financial industry,” Whurley recalled. “They used to call us brutally Honest Dollar,” for the company’s practice of starkly assessing its customers’ financial realities in order to impress upon them the need for a retirement account. “But what we found was not everyone was as bad off as they thought. A lot of people think they’re living paycheck to paycheck, but when you go through the finances, you say, ‘Well, actually, you go to the bar every weekend and you spend $400.’ ” (The audience in Austin could relate.) That revelation points to the necessity of better understanding customers’ relationship with money. Suntrust partnered with behavioral economics researchers at Duke to understand when and how to help people adopt behaviors that lead to financial confidence such as saving for emergencies.
INVISIBLE TECH IS GOOD TECH
The fintech developments are coming fast. Microsoft has been working on chips that will enhance financial data security and push AI to the edge. “A lot of the technologies we’re investing in, you may never see,” Doran said. “They live in the server farm. They’re in the hardware rebuild, in the new kinds of encryption we invented. If you don’t see it, that’s still okay, if it gives you the trust you need and the regulatory compliance you want.” While behind-the-scenes innovations such as these may not make headlines, they do allow for a more seamless, satisfying customer experience. “We’re really focused on providing more automation, more artificial intelligence in our teammates’ hands, to be able to service and spend more time with clients,” Meyer said. Thanks to technology, he added, “banks are in a position now more than ever to really help people with this struggle around financial confidence.”