Research Paper

Financial Services in the Workplace: Using Intermediaries to Achieve Long-Term Value

Discover the potential of HR outsourcers, payroll companies, worksite marketing firms, and other intermediaries to provide distribution and marketing opportunities for financial services.

Tuesday, November 1, 2005

he financial services landscape has changed dramatically in recent years. In order for financial services providers to acquire customers and reach emerging markets, partnerships and new distribution channels are needed. The workplace is an ideal channel for distributing financial services to potential customers, as it is more than just the place where people do their jobs. Employers have a unique relationship with employees that can allow for regular communication and incentives for saving and investing in financial assets. The workplace also provides a venue for firms to market products to customers at the point where they are in their lives. As employees’ financial needs grow, financial services firms can customize cross-selling techniques and grow options with the customer. While there are challenges in bringing innovative financial services to scale through the workplace, especially for lower-income consumers, workplace-based financial services have the possibility of delivering value to the financial institution, employer, and to employees.

But it can be very difficult for financial services firms to reach employers in a one-on-one fashion, especially since getting the attention of human resources (HR) professionals for product setup and implementation can be time-consuming and challenging. Moreover, commercial banks often have employer relationships but do not directly reach employees or understand their needs, while retail banks and credit unions often focus on one-off bank at work activities to reach end users, but do not have sustained relationships with employers. Non-depository institutions, such as stored value card providers and others, are also just beginning to look to the workplace as a distribution channel.

Luckily, at the same time that the financial services field is changing, the workplace is transforming in ways that can help to solve these problems. Today, additional distribution points are available to financial services providers wishing to distribute products and services to employees. These methods include pathways through workplace “intermediaries,” including HR outsourcers and professional employer organizations (PEOs), payroll companies, worksite marketing firms, and employee assistance programs (EAPs). These intermediaries are increasingly offering financial services and voluntary benefits. They have great scale in many cases, and may also provide a more trusting relationship with employers than financial services companies alone could offer. Finally, these intermediaries often understand the need to have relationships with both employer and employee.

Financial Services in the Workplace: Using Intermediaries to Achieve Long-Term Value

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