Financial Wellness Tools

Helping employers provide personalized, high-touch, and holistic financial wellness tools to their entire workforce.

Overview

Financial worry is the leading stress inducer for more than three out of five Americans, with younger age groups being among the most impacted. This stress gets carried forward at work and has a significant impact on employee productivity causing businesses to lose billions each week. Workers, especially Millennials and Gen-Zers, are increasingly looking to employers to offer access to financial wellness tools. Financial well-being has proven to enhance employee engagement and productivity at work, resulting in low staff turnover and allowing businesses to attract and retain top-tier talent.

Financial wellness tools include a collection of platforms and applications designed to improve the financial health of the end-user. Financial health refers to the state of an individual’s financial position, defined largely by one's net worth, level of savings, financial preparedness, and debt. These tools can either be provided as an employee benefit to improve the financial well-being of staff or are available as apps to be downloaded and used directly by the consumer. 

Technological developments such as open banking APIs have allowed third-party developers to build applications that integrate with users’ bank accounts, allowing them to analyze transactions, provide contextual advice, and automate actions such as payment of bills and debt.

Industry Updates

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Market Sizing

The US Financial Wellness Tools market could reach USD 4.0 billion–5.0 billion by 2028

Conservative case

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Base case

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Expansion case

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Use cases


Financial wellness tools are implemented by employers across various industries to improve the financial health of their staff. These tools are designed to address various use cases, such as providing early access to earned wages, personalized financial coaching, student debt management support for different employee cohorts, debt consolidation, and payroll-deducted debt repayments.

We have identified such use cases below:

Market Mapping


Companies offering platforms for employers to provide financial wellness as an employee benefit account for the majority of companies in the industry. Offerings range from financial coaching, tools to manage personal finances, financial support (such as low-cost emergency funds or earned wage access), to mechanisms to help employees manage their debt, particularly student loans.

As of March 2024, disruptors and watchlist companies identified across the employee benefits segments had attracted more than USD 3.4 billion in funding. Companies that provide B2C applications for budgeting, saving money, and lowering expenses had raised in excess of USD 780 million as of the same date. Most startups in this space are in their early or growth stages and have been established over the last decade.

Incumbents that offer benefit platforms are largely financial services companies who also use these platforms to market their own financial or investment products to employees.

The Disruptors


Most disruptors provide financial wellness platforms that focus on offering personalized financial coaching and education platforms to employers, who in turn offer them to its staff. Even the companies with a focus on other segments such as financial support or debt management usually come bundled with tailored educational content or access to professional coaches. Most disruptors across the industry hub are in their early or growth stages.

In terms of funding, Salary Finance, Wagesteam, and PayActiv are among the largest disruptors in the employee benefits/B2B space which provide platforms for employers to provide financial support to their staff in the form of early access to earned wages. The greatest number of startups, however, were in the business of providing platforms for financial coaching for employees.

Albert, Cleo, and Truebill are among the key players in the business-to-consumer (B2C) segment, which includes companies offering apps to consumers to formulate budgets, and manage their savings and spending. Albert is the highest funded disruptor in this space, having raised USD 176 million as of March 2024.

Funding History

Competitive Analysis


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Incumbents


Incumbents in this space mostly include financial services companies, who are developing their own platforms that provide employers with resources for financial education and other personalized solutions to improve the financial health of its staff. The incumbents also use these platforms to market their own core products such as debt and investment products to potential users. In addition, the incumbents also include companies that provide HR related tech such as payroll management, and employee wellness solutions who have developed solutions for employee financial wellness.

Most incumbents have entered this space using internally developed products, with some notable acquisitions by companies such as Intuit, Morgan Stanley, and KeyBank.

In House Development
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Investment
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Notable Investors


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Overview

New technologies are allowing individuals to improve financial health using employer-sponsored platforms or business-to-consumer smartphone apps

Financial wellness tools include a collection of platforms and applications designed to improve the financial health of the end-user. Financial health refers to the state of an individual’s financial position, defined largely by one's net worth, level of savings, financial preparedness, and debt. These tools can either be provided as an employee benefit to improve the financial well-being of staff or are available as apps to be downloaded and used directly by the consumer.
Services provided as an employee benefit range from personalized financial coaching/education to personal budgeting and monitoring tools, along with platforms to manage debt and obtain financial support. B2C apps provide tools for individuals to create budgets, automate savings, track and manage expenses, identify and cancel unwanted subscriptions, and lower bills.
Financial wellness platforms enable employers to scalably provide a personalized and high-touch approach to financial wellness to their entire workforce without administering the process on their own. This is in contrast to generic financial education programs offered by companies in the past. Financial wellness benefits are added to standard employer benefit packages as organizations try to improve employee engagement and promote productivity by relieving financial stress. Companies in this B2B space, such as PayActiv and FinFit, offer holistic financial wellness tools that take into account individual characteristics such as demographic factors, personality traits, financial literacy levels, spending patterns, and current financial circumstances to provide personalized recommendations. 
Both B2B platforms and B2C apps use machine learning and data analytics to evaluate individual data in order to profile users, monitor progress, and update recommendations based on individual milestones. Employer-sponsored platforms provide channels for employees to submit information about their financial circumstances confidentially and often combine digital solutions with the input of a professional human financial advisor. Users can interact with the platform using chatbots to obtain personalized advice. These are generally more valuable for low to middle-income earners who typically lack access to professional financial advice. 
Open banking APIs enable third-party developers to build applications that can connect to financial institutions and work with the financial information of the user. These APIs have driven the rise of financial wellness tools that integrate with a user’s bank account to analyze transactions, provide contextual advice, and automate actions such as payment of bills and debt, and transfers to savings funds. 
Key segments within Financial Wellness Tools
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