Financial wellbeing: the three pillars

That focus underlies our transformation at ANZ and we have already made progress: as part of our new ways of working model, we have established multidisciplinary teams driven by delivering customers value – fast – and for understanding at a deeper level just what it is our customers value.

" As a bank, we have a significant role to play in helping our customers get on top of their money…”

If we can do that we will help our customers and they will reward us with their advocacy.

This thinking goes beyond product, extending our consideration to the broader needs of the customer – no longer thinking just about the home loan product but the broader needs of home owners; not just thinking about the deposit product but about the broader needs of savers and investors.

As a bank, we have a significant and vital role to play in helping our customers get on top of their money. We have a proud history, through initiatives like our Saver Plus matched savings program and Money Minded financial inclusion and literacy program, of focusing on financial wellbeing.

These programs, long-since delivered in partnership with community organisations and government, have proven to be an important part of the financial inclusion story for lower-income Australians. 

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Let’s be clear: for a bank, there are also strong commercial imperatives attached to the achievement of great customer outcomes.

It is really a win-win situation and stands to reason that a focus on wellbeing, and on engaging customers well to make them more successful, will manifest in long term advocacy and value. 

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Active saving

From the extensive research we have conducted, what is overwhelming clear is the benefit that comes from actively saving. This means putting something away for a rainy day and having an appropriate buffer in place so there is no requirement to turn to debt for everyday expenses.

For the majority of Australians, our ability to save has a great deal less to do with income and a great deal more to do with behaviours. And the encouraging news is these can be learned behaviours.

Let’s face it though, saving money can be boring. Most people don’t jump out of bed in the morning and cry “I can’t wait to put some money aside for a rainy day!” Well, no one I know of anyway….

Last year, we conducted a large and fascinating body of academic research utilising our own customer data, used in conjunction with a Human Centered Design approach in order to deeply understand the behaviours of extreme spenders and extreme savers.

So what are the things that do make us get out of bed in the morning? They are things that matter, our hopes, our goals, our dreams – whether for ourselves, our children, our family. It is not a mortgage but a home to call our own.

For us as a bank, what we are really trying to do here is to help our customers realise and achieve these goals more easily with innovative solutions.

Not borrowing for everyday expenses

There is an extremely strong link between active saving and borrowing for everyday expenses.

I’m sure many of us have been in a situation where we receive the letter notifying us our car registration is due - with only a month’s warning you need to come up with $A800 which you hadn’t planned for. These are the types of situations where we tend to turn to using debt for everyday expenses like the weekly groceries.

But by saving and having a buffer in place the need to borrow money in these situations is greatly reduced. This means products like credit cards can be used at their best as a convenience or utility, not as a necessity.

Ensuring our products are used in the way they are intended is an important part of our focus. We know people can come unstuck when they first start using credit or when they’re caught in a persistent cycle of revolving credit.

We are striving to help those customers’ manage their finances more sustainably, using some engaging content and data-informed campaigns on our digital platforms - all with the aim to educate and empower our customers about better financial management.

Paying down debt

Actively paying down debt is the final piece of the financial wellbeing puzzle and this includes actively paying down the principle of a home loan. Fundamentally, we think it is good for people to be paying down the principle and getting to home ownership faster.

But shifting from an Interest Only (IO) home loan to Principle and Interest (P&I) can be a difficult adjustment and we recognise customers need time to prepare.

So we’re helping customers by sketching out real scenarios six months in advance of the change and then following up with personalised calls and prompts to ensure readiness.

These are just some of the ways we, as an organization, are embedding concepts of financial wellbeing in the way we seek to support our customers getting on top of their money.

This story is an edited version of a presentation delivered at the 2018 Environmental, Social and Governance (ESG) Briefing in Melbourne.

Kath Bray is Customer Engagement Lead at ANZ