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By The Financial Brand’s Editorial Team
Enabling financial wellness among customers is increasingly being seen as a competitive advantage for financial institutions. It’s something large numbers of consumers are looking for.
More than two in five consumers (44%) who described themselves as living paycheck-to-paycheck were “extremely” interested in becoming more financially literate, according to a survey from and Unifund. For banks and credit unions that help customers create a sense of financial wellbeing, it can be a differentiator, according to Gallup, building up goodwill and acting as a hedge against negative PR.
However, engineering a real financial wellbeing program for customers is neither cheap nor easy nor quick, Gallup notes. So it’s not too surprising that many financial institutions fail at creating and implementing effective financial wellness programs. In a 2019 poll from the National Foundation for Credit Counseling, just 25% of consumers reported that they would turn to a bank or a credit union for financial education, which was down from 32% the previous year.
That’s the kind of challenge Bank of America seems to thrive on, especially with its deep reserves of capital and talent. It tackled financial wellness with the fall 2020 launch of its digital financial health and wellness program called Life Plan. Remarkably , the Charlotte, N.C.-based megabank reports that Life Plan reached five million users in one year, becoming the bank’s most rapidly adopted digital feature of all time. That includes even Erica, its phenomenally successful virtual assistant.
Available within BofA’s mobile app and its online banking platform, and integrated with the bank’s branch network, Life Plan offers a personal digital experience that enables consumers to set and track near- and long-term goals based on their life priorities, and better understand and act on steps toward achieving them.
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So how has Bank of America succeeded where so many digital budgeting and financial wellness tools have failed to gain widespread adoption?
“One of the core reasons is that we don’t think of it as just a tool, we think of it as an engagement platform,” explains Teron Douglas, Managing Director, Chief Digital Executive – Preferred Banking and Consumer Investments. “It’s an evergreen way of communicating back and forth [with customers] and making sure we are supporting them with the right tools to help them achieve their financial goals.”
BofA wellness app goals
Douglas says Life Plan’s ease of use as another key factor in its success. It does not require customers to input a lot of information or do a lot of manual work themselves.
“They can engage with it and get started within a few seconds,” he says. “You start by just indicating a few priorities, and you can continue to build on that if you want with minimal effort. And then we proactively work with the customer” by offering insights, suggestions and steps they can take to work toward their financial goals.
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Not surprisingly, much of the adoption of Life Plan has come from Millennial and Gen Z customers. That was part of what BofA had in mind. These are cohorts that usually express the most interest in digital services to help plan their finances and save money.
One year in, Millennial and Gen Z customers account for 62% of the Life Plans created, with Gen X and Baby Boomers making up 35%. Students — who are likely mainly from Gen Z — are another active segment, creating 20% of Life Plans.
Douglas attributes the aforementioned ease of use as a primary reason for these statistics, as this younger generation are “used to platforms being clean and easy to use. They want the output, but they don’t want to have to put in a lot of work to get it.” (Anyone old enough to recall using early PFM software can relate to this.)
Another factor is that this generation are at a place in life where they are making a lot of major financial decisions for the first time, such as buying a house or setting a retirement or college savings plan. They are looking for “more insights and financial guidance,” he notes.
That’s why the top five Life Plan goals are fairly predictable. According to the bank these are:
Additionally, 23% of Bank of America’s digitally active Hispanic clients have engaged with Life Plan. It’s part of a strategy Bank of America has to “consciously focus on that segment.”
In its first year, the use of Life Plan led to more than one million follow-up appointments with Bank of America financial professionals — both in-person and virtually. Associates hold collaborative Life Plan discussions with customers, some of whom are business owners, about their financial goals and strategies to achieve them.
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This integration between digital and in-person is a key aspect of Life Plan. As previously reported by The Financial Brand Life Plan operates in parallel with the institution’s 4,200+ banking centers. Associates see not only the same data that a customer using Life Plan sees, but in the same format.
That’s a big reason why Douglas says Life Plan is more than just a digital tool, but rather a “platform that is agnostic of channel.”
In early 2022, Life Plan will be further integrated with Erica, the bank’s AI-driven virtual assistant. Erica will provide clients who use Life Plan with proactive insights and steps they can take to help them make progress toward their goals.
Additional enhancements will offer integrated tools to help Life Plan users understand how their financial activities can align with their priorities, whether that’s budgeting, supporting a small business, community engagement.
“The key is to give Life Plan users the right solutions, guidance and tools in all channels from day one to help them be successful,” Douglas says. “In fact, we are seeing that customers who use Life Plan are much more engaged with us across all channels than those who don’t use it.”
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This article was originally published on October 13, 2021. All content © 2021 by The Financial Brand and may not be reproduced by any means without permission.
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