Background: As found in Phase One of the SPARK/DCIIA RRC data privacy project, an increasing number of plan participants are expressing the need for financial wellness support, while over 90% of employers are meeting the growing demand by offering some level of assistance through financial wellness programs. However, liability concerns related to data privacy have led to some resistance in their adoption and use, which includes solutions offered by fintechs. These solutions inherently require an additional level of data sharing or the establishment of new data usage channels, typically involving self-populated participant data.

Findings: According to a recent survey of participants conducted by LIMRA, most workers (60%) believe that employers should offer programs to alleviate financial, health, and emotional stress. Younger generations, particularly Millennials, expect their employer to provide personal information to external parties in exchange for customized solutions, as shown below:

40% of Gen Z

48% of Millennials

40% of Gen X

29% of Baby Boomers

In the RRC’s industry practitioner survey, 75% of advisors and consultants believed that financial wellness programs, such as those offered by fintechs, are beneficial and effective for employees. However, fintech data privacy trust levels were the lowest among all industry practitioners and participants:

19% of plan participants trust fintech providers significantly.

Consultants (46%) and advisors (43%) were more trusting.

Bottom Line: Fintech services are widely embraced by participants due to the value they offer in exchange for sharing personal information. However, a challenge lies ahead in bridging the gap due to diminished trust levels in data privacy and usage, coupled with perceived transparency issues in the protocols used by fintech providers to ensure data privacy and security.

Industry practitioners are actively working to strike a balance between minimizing liability and ensuring the utmost security of participant information. The upcoming Phase Two report, expected to be published in late summer, will delve deeper into the feasibility and desirability of an industry-wide data privacy solution.