This week, LifeCents is continuing to dive into the pressing issues and emerging trends that impact credit unions. This blog post is the second in our credit unions series. You can read the first blog post from the series here.

Consumer financial health is failing and has been for some time: one in three Americans has less than $5,000 in retirement savings, 21% of Americans have no retirement savings at all, and 44 million borrowers collectively owe $1.5 trillion in student loan debt (2019). Credit unions and their members are not immune to the impacts from these failing health issues.

It’s not surprising then that financial wellness programs are a hot topic these days. The promises made by financial wellness programs have been anything but understated. They are being hailed as the cure-all for the many financial woes that plague so many people—from the lack of emergency savings, retirement security, ballooning credit card debt, and mounting student loan debt.

Yet, even with the abundance of financial wellness programs sprouting up everywhere, the problem of poor consumer financial health persists. So, why are so many financial wellness programs failing to live up to their promise? Too often, financial wellness programs simply are not designed for success. These programs, while claiming to drive behavior change, are built on antiquated approaches and lack the innovation in design to make a meaningful impact.

For example, too many financial wellness programs still inundate participants with content like articles, videos, presentations, etc. as though greater volumes of information will contribute to meaningful changes in behaviors or lead to positive outcomes for participants. This approach is misguided, a recipe for failure, and will not drive the returns needed to shift the paradigm in consumer financial health.

Other programs are much too prescriptive for individual participants. These one-size-fits all approaches do very little to help individuals make progress towards—and achieve—the financial goals that are most important to them. In short, they lack the personalization that is needed to make the experience engaging and relevant—and ultimately drive meaningful outcomes.

So, how do you design a financial wellness program that will help your members in meaningful and measurable ways? Here are a few ideas to consider as you begin to plan your program:

• Be sure you are measuring the right things. Improving consumer financial health is about helping people acquire the knowledge, developing the skills, and gaining the confidence to make smarter decisions with their money every day. If you include these three dimensions—knowledge, habits, and confidence—in your program and have the ability to track them over time, then you’re taking the right steps toward improving the financial health of consumers.

• Create a highly personalized experience. Prescriptive approaches simply don’t work. Your wellness program needs to be designed to discover who people are and what makes them tick. Let them tell their story. Let them know you are listening, that they are being heard and provide value to them every step of the way.

• Long-term outcomes cannot be achieved without sustained and successive short-term engagement. No one ever finished a marathon without taking a first step or completing their first mile. The same applies to personal financial goals. You first have to help people take their first step, the next, and the next to reach meaningful milestones on their journey to achieving their goals.

• People are more than numbers. Improving savings rates, reducing debt, and strengthening credit are valid long-term goals for a financial wellness program. However, there are other outcomes that create the foundation for long-term success such as helping people improve their financial IQ, building their confidence, creating good financial habits, and reducing their financial stress. As importantly, these kinds of outcomes also make the program more engaging and make long-term outcomes possible (see above).

Financial wellness programs are in the spotlight now more than ever and are positioned as the much-needed remedy for the poor financial health that affects so many consumers. Yet, not all financial wellness programs are designed for success, even if they are marketed to deliver the behavior outcomes that we all want to hear. Personalization, engagement, and relevant outcomes are just a few of the key dimensions that need to be considered before implementing a financial wellness program. When designed properly, financial wellness programs can be the elixir that is much needed by credit unions to improve their members’ financial health.

Interested in learning more about LifeCents? Contact us at info@lifecents.com to schedule a demo.