What it takes to provide support for better consumer financial health: 5 questions with Holly O’Neill, President of Retail Banking at Bank of America
- Bank of America gets recertified by J.D. Power for outstanding client satisfaction with customer financial health support.
- How does the bank conceptualize financial health and what segments need the most help building economic downturn?
As the economic boat continues to rock, inflation has hardened into an unyielding reality for most consumers. Even though the past few months have recorded a decrease, inflation numbers are nowhere near pre pandemic levels. In such times, consumers may feel the need to turn to their financial institutions for everything, from crisis management to future planning. But this doesn't mean that banks are always responsive. A Personetics survey in 2022 showed that 63% of banking customers reported receiving no communication from their banks in the past 3 months about how to deal with the inflation crisis.
On the other hand, those who heed this call, can bring about big change. In the UK, NatWest, Royal Bank of Scotland, and Ulster Bank contacted eight million personal customers with support and information, with over 600,000 financial health checks carried out in 2022 with customers. These checks in turn provided customers with a much-needed breathing space when it came to loans and repayment plans.
But this is a broad range of services that organizations cannot offer if there isn’t already a holistic plan in place. If done right these plans enable customers to save, but also plan for an uncertain future. And above all, these are accessible to low- and middle-income households which can’t rely on generational wealth.
Recently, Bank of America was recertified by J.D. Power for outstanding client satisfaction with customer financial health support. Tearsheet spoke to Holly O’Neill, President of Retail Banking at Bank of America to learn how the bank builds solutions for the multifaceted issue of consumer financial health.
1) How does providing support for financial education change for different age demographics – for example, Gen Z?
Holly O'Neil, Bank of America: Each generation has different financial goals and a distinct approach to money. As a bank, it’s critical that we deliver personalized solutions and educational resources to meet our clients’ unique needs for every life stage.
By way of example, according to our recent research, 73% of Gen Z feel the economic environment has made it more challenging to save. With that in mind, one of our goals is to help Gen Z access the education and tools they need to form saving habits. This includes tools to help them improve their financial knowledge in areas like budgeting, credit, borrowing and investing. One of these resources is Bank of America's Better Money Habits, which offers free educational tools and information to allow clients to build their financial future and make sense of their money.
2) Do you expect your work with Operation HOPE to increase or expand over the next few years? What results have you seen so far?
We’re continuously expanding and growing our work with Operation HOPE — including the addition of 180 financial centers in 17 U.S. markets in 2023 — and the program has already delivered significant results. As of the second quarter of 2022, HOPE Inside has provided more than 2,700 counseling services based on Bank of America referrals. The program has also delivered more than 300 financial education workshops.
On average, participating clients improved their FICO scores by 21 points, increased their yearly savings by $4,313 and reduced their annual debt by $837.
3) What areas and consumer segments need deeper attention and more work when it comes to improving financial health across America?
Each consumer segment has their unique set of financial goals, so our aim is to educate clients and provide the personalized solutions they need to build their financial wellness. We also understand that individuals in low-to-moderate income communities often start their financial journey on the back foot, caused by a lack of intergenerational wealth and growth/opportunity.
4) How is the oncoming recession expected to impact the everyday consumer? Is Bank of America taking any steps to break their fall?
Even as the rate of spending growth moderates, the Bank of America Institute reported consumer spending remains resilient. There’s no one-size-fits-all approach to preparing for an economic downturn, but we do offer tools and products that can help clients carefully plan their spending and save for an uncertain economic environment.
For example, our spending and budgeting tool allows clients to take a realistic look at their spending, which is critical to preparing and maintaining an accurate budget. Additionally, our Keep the Change program rounds up the price of every debit card purchase to the next dollar and adds it to your savings account automatically.
5) What kind of results have product integrations like Life Plan and Erica seen? What issues have consumers pointed out and how are these products expected to evolve?
Both Bank of America Life Plan and Erica continue to drive digital engagement among our 56 million verified digital clients, helping them better manage their financial lives. Last year, Erica surpassed 1 billion interactions among 33.5 million clients since its launch in June 2018. Additionally, nearly 10 million clients have created a Life Plan since its debut in late 2020.
We’re always working to improve our digital offerings and incorporating client feedback and data is a key part of delivering the best services possible. Our team reviews Erica client interactions to understand client needs and requests, helping us identify and implement enhancements.