For those in the personal finance universe, there may be no bigger challenge than the savings crisis in America. Each year, the void between what Americans need for a comfortable retirement and what they actually save grows even larger.
Globally, over the past five years, there has been an 82% increase in the number of people above the age of 65. Yet, despite the growing number of retirees, recent estimates show that employers are not offering retirement plans to more than 56 million workers in the U.S. The World Economic Forum estimates the global retirement industry is underfunded by $70 trillion, a gap that is racing towards an expected $400 trillion by 2050.
As the population ages, the likelihood of facing a dire financial situation intensifies—That is, unless we can find new ways for people to save.
Aside from the individual challenge this represents, the lack of long-term savings also has broader economic implications. If people are not planning for their retirement, they are more likely to face hardship in old age, which will strain traditional social safety nets and contribute to economic instability. According to the Fed’s 2022 Economic Well-Being of U.S. Households survey, 37% of Americans lack enough money to cover a $400 emergency expense.
Access to employer-provided retirement is lower for low-wage workers, people of color, and those who work in the gig economy, all of which exacerbates existing divides of wealth and transmits patterns of financial insecurity across generations.
Addressing this crisis requires solutions and strategic partnerships. For financial decision-makers at banks, collaboration with fintech companies can be an innovative way to transform the retirement savings market and increase access to new customers.
Three fintech companies have emerged as key players, leveraging technology to increase access to wealth-building and financial planning services for all:
Chime
Chime, a financial technology company that partners with regional banks, is the go-to for fee-free mobile banking services. With services for online banking and money management—not to mention no overdraft, minimum balance, monthly fees, or foreign transaction fees—Chime is helping improve America’s financial health. It’s banking made easy.
“Together with our bank partners, we offer better banking products and services by addressing the fundamental misalignment in the industry between what’s good for banks and what’s good for consumers,” the website states. Chime empowers Americans to take control of their finances, whether it’s with the Automatic Savings feature, fee-free money transfers, building credit, and more—there’s something for everyone.
Wysh
Wysh is an insurance company that brings the power of protection to financial institutions. Alex Matjanec, Wysh’s Founder and CEO, says that Wysh prioritizes providing consumers with holistic financial protection that fits into both their short and long-term goals and desires.
Wysh’s Life Benefit product redefines the scope and reach of traditional life insurance by embedding micro-coverage into the financial ecosystems of its partners. Unlike conventional life insurance policies that require separate underwriting and commitment, Life Benefit seamlessly integrates with the existing account structures of financial institutions. In doing so, Wysh makes saving more accessible for individuals who otherwise may not have had that opportunity.
“Life Benefit represents a paradigm shift in how financial institutions approach customer value and retention,” says Matjanec. “By seamlessly integrating protection into everyday banking products, we’re not just offering insurance – we’re fundamentally changing the relationship between banks and their customers. This creates a powerful differentiator in a crowded market, driving both customer acquisition and long-term loyalty.”
Wysh is collaborating with UNest, a financial investing firm, to bring every family the tools to build a secure financial future for their children, by embedding life insurance as an included benefit and making it easier to receive protection through Wysh—and providing a more comprehensive protection solution for customers.
Rocket Money
Rocket Money is an all-in-one finance app making it easy to control subscriptions, lower bills, and manage spending. Denoted as “the money app that works for you,” Rocket Money takes the challenge out of money management and replaces it with empowerment to help users save more and spend less. The app has over 5 million members, and for the past 5 years, has saved them over $1 billion—and counting.
Whether individuals need a service to find and track subscriptions, receive a breakdown of their finances, or automatically put away savings without thinking about it, Rocket Money offers this and more. Individuals can take back control of their financial lives in one app.
Such collaborations are integral when it comes to addressing America’s savings crisis. By harnessing the technological prowess and dynamism of fintech companies with the scale and stability of established banks, the heart of the savings crisis can be revived and allow more people the opportunity to reach their savings aspirations.
As the adage goes, “We need all hands on deck.” Fintech businesses, traditional financial institutions, and legislators must all work together to create innovative solutions and give people improved options to save and take control of their financial futures.
Whether it’s life insurance that can be easily embedded into one’s bank account or a mobile app that helps users better automate their savings, fintech companies have a big role to play in improving Americans’ financial lives.
By democratizing wealth building and financial planning, finch companies like Wysh, Chime, and Rocket Money are empowering users to feel confident about their financial future and addressing America’s savings crisis all at once.
To find out more, visit this link today: wysh.com/business.
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