Using fintech to improve financial wellness with Salary Finance’s Dhiren Master

Financial wellness is a popular topic as firms better understand that employees are happier and more productive if they're less stressed out about money. Salary Finance is a leading firm in this space, providing salary-linked employee benefits. Employees can get a loan, start saving or get an advance on their salaries. Turns out, retention, productivity and employee engagement goes up with better financial wellness. Salary Finance is active in the UK and US. CMO of Salary Finance, Dhiren Master is my guest today on the Tearsheet Podcast. Subscribe: iTunes I SoundCloud I Spotify The following excerpts were edited for clarity. The genesis of Salary Finance Salary Finance was set up with a social purpose: to work alongside employers to develop financial wellbeing via salary-linked loans and savings products. Our aim is to help people around the world to get out of debt and into savings. This is absolutely a substitute to payday loans. It's designed for people who find it difficult to make ends meet. We currently serve employees on hourly and monthly salaries. How people get into financial trouble The typical problem that most people have is when they miss a couple of payments on a loan. Your credit scores drop dramatically and you lose your ability to access cheap finance. Some banks won't lend. If you do get approved for a credit card, it will be a small limit and a high APR. If you get into financial trouble, the only thing left is a payday loan because you're a high default risk. With a salary-linked loan, the risk of default decreases because we deduct the loan repayment directly from a paycheck. So, you get paid and we get paid at the same time. Technically, the only way you can default is by quitting your job and cancelling the direct debit with the bank. Because we offer this through the employer, our marketing costs are lower. So, we're able to pass on the benefits of these lower costs in the form of lower interest rates. That's how the business model works. The employers that end up being our clients emphasize financial wellness in their organizations. We've done two large surveys in the US and UK. In both markets, there's a high degree of financial worry. Those worries lead to sleepless nights. This has an impact on the quality of their work and their relationships with coworkers. It's a loss of productivity and an increased churn rate. Employers that understand the link between financial wellness and productivity and retention come to us to help develop their financial wellness strategies. How Salary Finance differentiates itself We started in the UK four years ago. We opened in the US during the summer of 2018. We've been recognized in the UK as the most socially responsible business of the year. We've also won a couple of rewards for innovation. We are first and foremost focused on getting people out of debt. Our rates are competitive. We're constantly innovating in new products. We started with our borrow product -- loans for debt consolidation. Then we introduced save and advance. We also provide financial education. In the UK, we're the only one with the full suite of solutions. How Salary Finance integrates with an employers From the time of agreement to launching can be as quick as a week. There's an information security process to start. Then, we need to do payroll integration, which is a relatively straightforward task. We agree on how much data to share and train up the payroll people. We work like other employee benefits which come as payroll deductions. Implementation is relatively quick and hassle-free. Our clients see this as a way of helping their employees' financial wellbeing. They do a lot of communication with employees about how we can help them. When we're part of an overall financial wellness program we have the highest levels of engagement with our products.