8 min

Attentive finance

The wellness industry – meditation, yoga, aromatherapy, and so on – has been enjoying a huge yet unexpected boom in recent times. As crises reverberate around the world, the desire to focus on oneself and one’s wellbeing is spreading among the population and becoming a basic need. Brands are adapting their rhetoric to sound more soothing. Even the finance industry is softening its messaging and taking customers’ wellbeing into account.

“There's no point in worrying about the future. All the predictions are always dire and shambolic.”

David Cronenberg

The consequences of a crisis are measured on an individual level. Companies typically check a country’s health through the prism of economic criteria and financial scores. But global crises, and especially the efforts to address them, put the resilience of individuals and businesses to the test. In addition to economic indicators, there are tools for measuring a population’s mental health. Repeated major financial and public health turmoil creates a climate of dread and increases people’s stress levels. With nearly 40% of households in G7 countries reporting a decline in income as a result of the pandemic, uncertainties about the future are fuelling multiple fears and impacting psychological health. In fact, the WHO has recognised psychological wellbeing as a key factor in an individual’s overall health. Financial anxiety, which has increased in the current economic climate, remains the most common source of anxiety and can have serious health implications.
Since money has always been seen as a stress factor, can finances and wellbeing go together? How can banks assuage households’ deep-seated fears and anxieties? Is universal financial wellbeing possible?


Household morale

Stress has no borders. Almost 80% of Belgians¹ say they are worried about their finances. More than 60% of French people² admit they are stressed when they think about money. And 25% of Americans report they’ve had sleep disorders since the sub-prime crisis. This stress, which can impair cognitive functions, is also observed in young people: 51% of Generation Z³ members are afraid that financial crises will prevent them from having the life they desire while 43% fear they will never have enough money to be happy⁴. Clearly there is a correlation between economic crises and increased psychological problems and anxiety. As global events become more alarming, collective fear and feelings of uncertainty are crippling financial transactions and prompting households to behave cautiously. Saving is turning into a safe investment that helps prepare for the unknown, easing stress but slowing down consumption and yields.

Cortisol

Money is an integral part of our lives and as such can be a constant source of stress – and not just for the poor. The macro-economic situation, the health of the stock markets and even the geopolitical context all have an impact on financial peace of mind and give rise to fears of losing financial capital, which has often been built up over a lifetime of work. Luc Rodesch, Executive Committee member and head of private banking at Banque de Luxembourg, notes that “money-related worries never go away and in recent times have actually tended to increase. One of the main reasons is historically low interest rates which are forcing investors to turn to riskier equities or investments.” In a changing global context, economic and political instability can be a source of stress. Some governments are even able to go as far as seizing a portion of savings in the event of high indebtedness. Says Luc Rodesch: “To preserve investments and reduce customer stress, banks must steer clear of anything that is overly complex. That’s the main lesson to be learned from previous economic crises.” Information is now playing a particularly strategic role when it comes to dealing with the external risks that impact investments and can often quell anxiety. However, it requires some restraint. Thinking a lot about money and one’s investments or just checking one’s accounts increases the body’s level of cortisol, the hormone that causes stress. In short, “the more we are aware of the economic value of everything that happens, the higher our cortisol level and the more stressed we become.”⁵ At the turn of the century, French sociologist Nicole Aubert warned that “constant connection can turn into an alienation tool,”⁶ plunging us into a world of constant flux that keeps us in a state of alert.

“Constant connection can turn into an alienation tool.

Nicole Aubert

Fear of the void

In 2020, 59% of US households said they were more stressed out by the pandemic’s financial impact than by its health impact⁷. Financial stress rose dramatically when lockdown began and got even worse when it ended. The long-awaited “freedom” brought with it the grim threat of recession, exacerbating the stress of a large portion of the population unable to see a future. The post-pandemic world is emerging as an even more unstable one, triggering large-scale restructuring plans and resulting in the sacrifice of some of its population. The “enforced pause” in most countries’ productive apparatus is without historical precedent and sets in motion an unparalleled and destabilising economic recession. The 2008 economic crisis was a traumatic experience for a large portion of the population and economists alike, who failed to predict it. The new crisis of 2020 is like a “black-hole economy” that is shaking up the forecasting models and turning the “abnormal” into the new normal. According to the IMF, the public health crisis is hitting low-income households and vulnerable populations especially hard and “threatening to wipe out the significant progress made since the 1990s in reducing global poverty”. Dire reports on social media and mixed messaging from public authorities confront households with multiple levels of risk.

Managing complexity

Banks are taking a responsible and empathetic approach, placing as much importance on their customers’ financial wellbeing as on their physical wellbeing. As Luc Rodesch points out, banking stress often comes from a lack of understanding and control of the situation: “The overall complexity of the financial markets and their instruments can be frightening. When you don’t understand something, you get anxious.” Monitoring apps and “fun” services help familiarise the public with the world of finance. Some online operators offer users an experience based entirely on gamification, with interfaces designed to facilitate saving. They propose spending-reduction targets and send customers regular notifications with advice or encouragement on how to achieve their goals. Online games, informative messages and fun tools supplement the banks’ arsenal of ways to show their increasing attentiveness towards their customers. For its part, Banque de Luxembourg focuses on education and easy-to-understand communication that “eschews technical/trading terms”. Learning and stepping back are the best ways to understand, rather than just put up with, the financial forces at work. To familiarise customers with financial management, some apps offer risk-free “micro-investments” and slow-money transactions that support sustainable causes and make finance available to people with no particular experience in the field. These digital services, which are highly developed in Japan, allow people to invest small sums and develop the ability to anticipate any kind of situation. In the banking world, the unknown is frightening. Says Luc Rodesch: “Stability is the main motive for seeking reassurance. Customers trust a banker if it’s always the same person. It’s also important for the adviser to be attentive, i.e. empathetic and even altruistic. They have to find solutions that meet the customer’s needs and concerns, rather than just sell products.” The relationship with the adviser can therefore be the best natural immune defence against stress.

Stability is the main motive for seeking reassurance."

Luc Rodesch

Based on these core, salient points, we can devise two scenarios just to see how finance could potentially shield us from anxiety. As in any exercise involving a fictitious scenario, these two proposals combine verified facts and subjective biases and pit outlook against prediction.

Scenario 1: the guardian-angel bank

In this scenario, the black hole is widespread. The fierceness of the crises and total questioning of the capitalist model upset the predictive models. To boost growth, governments go back to their former free-market reflexes, leaving the path open for businesses to increase their productivity “whatever the cost”⁸. Faced with this anxiety-provoking situation, the guardian-angel banks get involved in their customers’ daily lives and develop a close, personal and unbiased relationship with them. Regular notifications reward efforts to save money, while poetic messages offer encouragement and put tough times in perspective. As the global population increases its life expectancy and centenarians become commonplace, banking services are adapted to cover all stages in life, while online tools measure any physical, mental or financial strain customers might suffer. A spike in the “stress” index is dealt with immediately as it may be the sign of an unforeseen manoeuvre or attempted fraud. Banking experts quickly assess the risks and intervene to ease the situation using voice assistants and domestic robots.
Intelligent assistants identify stress factors and invite customers to talk about their doubts or lack of understanding so as to better defuse their stress. Banking assistants also help compare the lowest prices, select the best products and make sure no one loses any sleep. The assistants’ soothing words and the advisers’ kind messages do the job and achieve a perfect balance between saving and consumption.

Scenario 2: wellness therapy

As they get deeper into what now appears to be an inevitable economic crisis, most consumers become cautious and view the global market differently. Instead of excessive consumerism, they champion the onset of a new frugality made up of local businesses. The “second-hand” market actually becomes one of the safest stocks. A legion of small businesses promotes short supply chains and invests their profits in social and societal initiatives. While finance slows down considerably, it exits the crisis with a level of trust that is higher than ever. With the “sharing” economy, individuals go from “I” to “we” and understand that their own wellbeing depends on that of the community, the main lesson learned from the crises being that risk is first and foremost collective. Banks promote inclusive, community-based strategies. It becomes normal to share accounts with close groups, while apps to help one another financially enjoy resounding success. Every time a friend is helped, rewards are unlocked and allow the user to support the charity or non-profit of their choice. Links between the banks themselves are also strengthened. The relationship is no longer exclusively with the banker but rather is community-based, where everyone can enjoy advice and motivational messages from their “banking partners”.

In both scenarios, the bank is measured in its involvement and “humanises” its relationships. Messages sent to customers are no longer automatic notifications but partner messages. Online tools are always used sparingly so that advantage can be taken of the simple, partner-based relationships that those very tools make possible. It’s safe to bet that the bank of the future will place even more importance on the human role, on listening to customers and, most of all, on showing empathy. A third scenario might have imagined training courses for customers to provide them with certifications to become informed investors and savers, and investment schools and holiday camps that combine business with pleasure and promote personal development.

Key points

In the face of economic instability and recurring crises, the banker’s role is to help manage complexity transparently and with reporting tools that allow the customer to monitor their investments on a day-to-day basis.

Banks’ human, relational and emotional value is their best defence against financial stress, provided the advisers agree to be altruistic. 

Micro-investments and eco-responsible investments help absorb financial stress and familiarise people with savings and savings tools.

1 Ivox study for N26, 2019
2 CSA survey, 2017
3 Generation Z refers to individuals born between 1996 and 2010
4 Survey: Generation Z keen on learning about personal finance and credit, Experian, 2019
5 Audrey Chabal, Le temps c’est de l’argent, Forbes, 2017
6 Nicole Aubert, Le culte de l’urgence, la société malade du temps, Flammarion, 2003
7 PwC Survey, 2020
8 In July, French president Emmanuel Macron used this expression (considered by some to be unfortunate) to encourage the productive effort.