REWARD
again, we are kind of capping the amount that people can draw, which felt like the right thing to do when we launched in November 2019. After a couple months we found that those who had registered on the app but had never used it to gain any money just really liked having it so that they could see weekly how much was available. They’ve got a safety net there, providing a level of stress management, even though they weren’t doing anything different with that cash flow – so it was really helpful. Our average drawdown is about £79, and we’re averaging around about 1.4 transactions a month per user, slightly more than the average according to our provider. Generally, others are using the application a little more than we are, but we take this as a positive. We had two case studies we focused on. One was a young lad who was trying to buy his first house, and was using the app to see how much money he could spend at the weekend and so it was helping him to stop spending money that he didn’t have to. And the other was a mom of three who was using it for cash injection for her weekly school, food and whatnots. She knew she didn’t need to touch what she got at the end of the month, and so didn’t need to lean into high interest loan products again – which is part of what we wanted to achieve. What we’re trying to do now is to encourage saving so that people are not even needing to use the application. This is our next philosophical journey with our employees. Jaspal Randhawa-Wayte: Katie, you’ve rolled this out in a responsible way keeping in mind the financial wellbeing aspect. Have you found with your research unanswered questions? Maybe a small
minority of the population perhaps didn’t really want to disclose for what they are using the funds? Was that a concern? Katie Duxbury: We didn’t get 100% response to the survey. I suppose if there was any kind of nefarious spend going on, nobody is going to declare it in a survey to their employer. What we’re also finding is that people don’t now have to go through the indignity of going to their manager and saying they need that extra hundred quid for a holiday as they can do that through the app which is completely anonymous. They don’t have to ask for permission or forgiveness or whatever. Anything we can put in place that avoids that conversation is a good thing. Jill Bonehill: I think it’s reassuring to hear that the vast majority of people are asking for access to their pay for genuine emergencies or essential expenditure. James Herbert: Obviously different providers of pay demand products will have slightly different flows and funds, but the mechanics basically mean workers get earnings in real time. So, it’s a hugely powerful financial product.
What we find is that the better the level of financial understanding and education the more effective is the use of our product. The better educated people are, the more effectively they are going to manage their financial lives. There’s a range of different products available to corporations and chief finance officers of large organisations, but the man in the street has been unable to access many. Jill Bonehill: You mentioned ‘better educated’. Whose responsibility is it to ensure staff, colleagues, employers are better educated? James Herbert: That’s quite a big topic, and I think financial education needs to actually start appearing in schools. The Bank of England did a survey last year, and while 70% of millennials believe they have a good level of financial understanding, actually only 24% do. I think long-term we need to look at how we can educate people from a younger age and put something into the curriculum. Let’s start teaching children so they can better manage their finances. Short-term we’re in a really interesting position as the level of engagement in our app is phenomenal. We’re seeing an 80% registration rate, with active users accessing the app about 2.1 times a day and drawing funds about 4.1 times a month. So, we have a really good opportunity to drip-feed financial education in small bite-sized pieces. And, therefore, employers have opportunity to drive that engagement, to help educate their workforce. n The second instalment of the two-part report of the roundtable will appear in the September issue.
| Professional in Payroll, Pensions and Reward | July/August 2020 | Issue 62 40
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