It’s a global phenomenon: people are being more cautious with their finances.
Last year brought home the importance of saving, investing, and getting out of debt. Everyone deserves access to tools to help them achieve financial wellness.
(Good news — there’s Plum.)
In this episode of Payments Innovation, host Lauren Passey chats with Thanos Bismpigiannis, Head of Product at Plum Fintech, about financial wellness and resiliency. The two discuss…
- Why financial wellness is what customers need most
- The process for building financial resilience
- Automation in Wealthtech
“On average, our customers end up being around £2,000 better off per year. If you added it up along with the investments, it’s multiple tens of thousands of pounds in somebody’s lifetime.” — Thanos Bismpigiannis
The need for financial wellness
At the macro level, central banks are trying to do their best to help their economies by keeping interest rates as low as possible, among many other things
At the micro-level, customers are responding to the uncertainty of the pandemic by trying to take better control of their day-to-day finances — and essentially build up their financial resilience.
Canceling travel, reducing spending, and working to pay off debt.
“We saw deposits go more than five times up during the beginning of the lockdown,” Thanos said. “We’ve also seen more and more customers as they get hold of their savings, to start looking into opportunities to learn how to make your savings grow.”
True wealth management
You don’t have to start with thousands to begin to manage your wealth. It doesn’t require an extra level of income or extra savings to get started.
“We make this accessible to everyone, essentially, and we also make it very easy to understand and very easy to use,” Thanos said.
Wealth is for everyone, not just a few.
Plum is a wealth management tool that gives users control of their finances through automation and helps them set and achieve financial goals.
“On average, our customers end up being around £2,000 better off per year. If you added it up along with the investments, it’s multiple tens of thousands of pounds in somebody’s lifetime,” Thanos said.
“I can see automation moving even further. We strongly believe that there will be a point where your finances will be in fully autopilot mode.” — Thanos Bismpigiannis
Beginning to build financial resilience
Here is the process that Plum guides customers through.
The users of Plum are diverse, but they do all have this in common: they haven’t ever invested before.
Manage your spending
Different customers with different needs, yes, but many are living paycheck to paycheck and have never saved before.
Using their own data and information, users can view how much they have been spending on what. They can also see how much they could save if they changed spending habits or switched bills to different providers.
“You can see a comparison of how you spend versus how somebody with a similar background spends,” Thanos said. “It keeps people in this perspective of where they are and where they stand within the community.”
Save through automation
Many customers want to save but have no idea how. The app gives them empowerment to see in a visible and actionable way what the most advantageous actions are.
Often, it’s to leave things to automation. As in, set up a savings plan and let it be.
Learn about investment
Some Plum customers are ready to invest straight away, but others (most of us) need education, resources, and suggestions.
“They start feeling the empowerment that they can really take care of their finances pretty much through the application,” he said.
The ultimate goal of Wealthtech
Right now in Wealth-tech, there is a strong trend towards making things a lot more accessible and easier for customers to use. You shouldn’t have to memorize a finance glossary to manage your own money, right?
People who want to invest their money don’t have to have thousands of pounds before they can get their money managed. They can access these services through their phones.
“I can see automation moving even further. We strongly believe that there will be a point where your finances will be in fully autopilot mode,” Thanos said.
All of your finances will be linked together and managed in just one spot. This sounds incredibly freeing for customers to live their lives and enjoy what they do on the foundation of easily accessible financial wellness.
“The ultimate customer need is to build financial resilience.” — Thanos Bismpigiannis
Investing for financial resilience
Managing your spending and saving is incredibly important, but investment is where true financial resilience lies.
Automation makes that possible for everyone. No more picking and choosing financial services (or not even knowing what’s available). All the services are available together to make decisions easy.
“The ultimate customer need is to build financial resilience,” he explained.
Financial wellness impacts everything, from our stress and mental health to our very families themselves. “By a start-saving approach and start-investing approach, customers can get introduced into that in a way that feels much more accessible and easy to adopt,” Thanos said.
At the start of using the app, customers don’t know how to pay off debt. They gain the experience and knowledge of how to, for example, invest for retirement.
The app itself allows the customers to grow in confidence and ability to the point of achieving investment goals.
“The problem of making sure that you have the relevant financial resilience to make you feel good, essentially, with your finances and pretty much have your financial life under control — it’s a common problem that we see across the world,” Thanos said.
Connect with Thanos on LinkedIn or Twitter, but first download Plum.
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Until next time!
