Why record keepers are becoming workplace financial wellness firms, ft. FIS

More than half of Americans report that they will run out of money when they stop earning a paycheck and millions haven’t saved enough to maintain their standard of living in retirement, There is an urgent need to re-imagine the role record keepers play in financial wellness, and it starts by leveraging technology to close the gap between capabilities and customer expectations. 

“When I look at things like automatic enrollment and automatic increase, that’s where it starts,“ explains Will Hicks, Head of FIS Global Retirement Products and Services. “Then it bleeds into the technology phase in terms of how you deliver that. How do you actually let participants know how that impacts their financial future?“

The sector is in transition, where traditional retirement record keeping is expanding into comprehensive financial wellness platforms. Scott Parker, Partner at Deloitte Consulting and leader of their wealth retirement practice, notes that the industry is “at the cusp of taking it to the next level and getting outside of what we’ve always done in the past, which is more and more communication.“

The change is driven by both technological capabilities and changing expectations which center around integrated solutions: “Our clients are asking us to bring those solutions together, because they want a clear picture of not just their retirement, but what are they doing in the banking space?“ said Sherry Baker, SVP and Head of Global Wealth Products and Services at FIS. 

Listen to the podcast to discover how retirement industry leaders are breaking down traditional silos to deliver integrated financial wellness solutions that go far beyond the 401(k). Learn the role that modernization, data, personalization, and cybersecurity play in pushing record keepers forward. It’s a conversation on record keeping organizations can meet regulatory requirements while meeting the daily engagement expectations of younger participants.

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The convergence 

The traditional silos between different business lines in banking are rapidly dissolving. Financial institutions increasingly recognize that customers need holistic financial guidance rather than fragmented services across different platforms and providers.

“The convergence of banking, wealth and retirement, we’re really seeing that across FIS,” Baker explains. “[Customers] want a clear picture of not just their retirement, but what they are doing in the banking space? Do they need a loan? Is it best to take out that loan from their retirement account? Is it best to maybe do a bank loan?”

Convergence means that record keepers need a change of approach in customer engagement. By tying together income and spending habits with long-term retirement growth and wealth accumulation, providers can “start to change behaviors by looking at all those insights in one vacuum versus looking at them separately.“

For FIS there is an inherent data advantage here that it can extend to its bank clients. “We’re uniquely positioned, because we have the data,“ Baker points out. “We have a lot of joint clients. We’ve also run a trust company. So in addition to banking wealth retirement, we actually manage the assets on the institutional side, so we have all the insights to be able to present that data back.“

Moving beyond the 401(k) mindset

The industry is expanding its definition of retirement services to encompass broader workplace financial wellness. The traditional retirement record keeping has been narrow in scope: “For too long we’ve thought about retirement record keeping, and that’s how we serve participants or individuals. It’s all in the context of just the retirement plan. But that doesn’t mean anything to what are actually their concerns, what matters to them,” shared Parker. 

This limited view fails to account for the complexity of participants’ financial lives. Someone may have overwhelming debt or multiple children, while another person has different financial pressures entirely. “The answer isn’t always to save more on your 401(k),” Parker explains. “It could be many other things that are more impactful to that individual.”

The workplace financial wellness paradigm fills this gap reflecting both participant demand and employer recognition of their employees’ broader financial needs. For traditional retirement organizations the new paradigm requires a conceptual restructuring. 

“We see most traditional retirement organizations even rebranding and saying we’re not just retirement, we’re a workplace, and workplace means a lot more than a 401(k) plan,“ Parker observes. The broader definition encompasses health savings accounts, emergency savings, debt management, and cash flow planning.

Technology modernization as the foundation

The ability to deliver integrated financial wellness depends on fundamental technology upgrades. Legacy systems built on outdated programming languages and monolithic architectures cannot support the data integration and real-time insights that modern customers expect.

“We’re upgrading COBOL and VB six (Visual Basic 6.0) applications to Java based systems using global data stores and containerized code,“ Hicks explains. “APIs are our communication layer, and that’s what allows us to hook into vendors and other applications inside and outside of FIS. So that’s where you get the connectivity into wealth and retirement.“

The technological modernization enables the kind of personalized experience that younger generations demand. Hicks notes a significant behavioral shift: “In the past, you would check your 401(k) account balances maybe once a year, maybe twice, and put it in the drawer. And I think today, they want to check that every day, just like they check their bank account.“

The modernized architecture also supports the ecosystem approach that clients increasingly require. “Clients are looking for an ecosystem,“ Baker explains. “So it’s not always going to be just FIS solutions. We’re going to have to think about the third parties that they work with, and how do we make sure that our platforms integrate and data and information available to create one seamless experience.“

The role of reactive and preventive cybersecurity strategies

As retirement platforms become more digital and interconnected, cybersecurity threats have intensified. AI creates new vulnerabilities as bad actors gain access to the same sophisticated tools that financial institutions use to improve customer service.

“Whatever tools we have in our hands to better support our call centers and make things better, bad actors have them, too,“ Baker said. 

FIS’s approach combines prevention and reaction strategies. The company leverages its fintech infrastructure to provide banking-level security for retirement platforms. “FIS is the only record keeping platform that actually has a fintech behind them,“ Hicks noted. “So all of the security that goes along with the banking and payment side then also translates over to record keeping.“

The reactive approach includes services like dark web monitoring and credit monitoring to help participants when their information is compromised. But Parker notes that the scale of investment required for effective cybersecurity will likely accelerate industry consolidation: “Companies the size of FIS have the investments behind it to put this in place. We still have a lot of smaller organizations that don’t have the resources to invest in cyber and fraud.“

The personalized advice revolution

Retirement services centers can emulate the customer experience successes seen in traditional banking: delivering relevant, personalized advice powered by comprehensive data insights. This represents a significant evolution from traditional approaches focused primarily on contribution increases and generic financial education.

“There’s an incredible amount of opportunity when we think about the impact record keepers can have on helping participants save and invest and prepare for retirement,“ Parker explains. “We’re getting to a new level of having data accessible and available, and we can create a different, hyper-personalized experience that the industry has never seen before.“

This personalized approach requires moving one step beyond just looking at a customer’s retirement account balance to understanding participants’ complete financial picture. Effective advice might involve paying down high-interest debt rather than increasing 401(k) contributions, or addressing cash flow issues before focusing on long-term savings.