Great to see the release of groundbreaking Financial Wellbeing Survey by ANZ bank and Elaine Kempson. Robert was on the Advisory Committee for the research. Given that promoting the wellbeing of customers should be at the core of what banks do, he was asked for some quick thoughts about how they should do it.
The #ANZfinancialwellbeing survey is great leadership from ANZ. It showed the biggest influences on wellbeing are:
- Active saving &
- Not borrowing for everyday spending.
So banks could:
1. Expand great programs like Saverplus that are proven to foster active saving, even for people with little money.
2. Improve bank products to actively encourage saving, eg
- virtual buckets within your account to separate savings from spending money,
- monthly reminders (praise) on how your saving is tracking,
- encourage an automatic transfer to your savings bucket each pay day,
- ask you to upload a picture of what you are saving for
3. All banks should ditch reward points for spending on credit cards. Reward points actively undermine financial wellbeing. They encourage the delusion that you “benefit” from using your credit card for everyday spending, but they just weaken people’s restrain on spending. See the research evidence here from Paul Harrison.
4. Banks should promote a norm that your DEBIT card is for everyday spending, and your CREDIT card is borrowing money to buy an important thing and pay it off quickly.