Employers providing the gateway to financial services

  • 13 Jun
  • 2 min

FinTech firms and banks no longer have a monopoly when it comes to targeting people with personal finance solutions. Nowadays companies in various sectors are making forays into this market as part of their overall responsibility towards their employees.

In addition to taking care of the physical and emotional health of their staff, some employers nowadays are also keen to take a hand in ensuring the financial well-being of their workforce. Major firms working in all kinds of non-financial sectors are teaming up with FinTech specialists to deploy practical tools that provide financial education and advice to their employees. One example is retail giant Walmart, which is working hand-in-hand with Oakland, California-based Even Responsible FInance and PayActiv, headquartered just down the road in San Jose, to enable the close to one and a half million US residents that it employs to obtain an advance on their wages ahead of their scheduled payday. This advance enables staff to minimize the bank charges payable on their credit card use, i.e. avoiding the penalties – usually in the form of high interest rates – that become due if they fail to settle the outstanding debit balance on their card(s) precisely on time. Meanwhile, San Francisco startup SoFi (an abbreviation for Social Finance) offers companies a system for managing the student debt incurred by their young employees (which currently totals over a billion dollars in the United States) to help them attain their personal financial objectives more rapidly. In the same vein, a company called Brightside was launched just a few weeks ago with the stated goal of alleviating financial stress, which has been identified as one of the main reasons for a decrease in productivity at work and can also lead to absenteeism and health problems. The Bay Area startup has developed an app, through which it offers to provide company employees with personal counseling from financial advisers applying methodology based on behavioral science, the aim being to give each person the best possible assistance with his/her financial decisions. This kind of service is proving increasingly popular in the US, where average household debt currently totals over $130,000.

By Marie-Eléonore Noiré