Save 10 for Bankers

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Bankers for

By Shelly Loftin Senior Vice President • Retail, Payments & Lending American Bankers Association

Today could be the day. The day you make a small decision within your bank that starts a ripple effect designed to change lives all over our great state for the better. Save10 has the power to change your family’s life, your employees’ lives and the lives of countless others by simply spreading the word.

What is Save10? Save10 is a specific call to action for women to commit to save at least 10% for retirement.

Why Save10? As banks committed to our communities, it is imperative we help people take charge of their financial wellbeing. That is an overwhelming task, so the least we can do is provide them with a simple starting point. Save10 is that starting point.

The United States has a retirement crisis. Half of retirees retired on Social Security alone, and future generations are even less prepared. We’ve gotten a bad deal on how we prepare to exit the workforce. Many of us delay saving for the perfect time, but that perfect time never arrives.

Why is Save10 targeted at Women? Women have longer life expectancies than men, step out of the workforce more often as caregivers, and make less money than men. This means that saving is more critical for women than for

Women also feel particularly alienated by the financial industry. If banks would speak to young women in college or just starting their careers with messaging to save 10 percent, to avoid credit card debt, to pay down those loans, and, more importantly, to feel informed and empowered right out of the gate, women will feel a lot less alienated from their finances. Which brings us to another strong argument for supporting Save10: your brand. Resources aren’t infinite, competition isn’t limited, your products aren’t perfect and you are no longer solely in control of your message. Building a brand associated with financial literacy, united around a key opportunity that affects everyone, with a simple goal of helping women save, is an easy win in every community you serve. As individuals are just beginning to save, they are less rate sensitive, which will keep your cost of funds low, but the return on the way you make them feel is high. The best brands are successful in making themselves human. What is more human than the struggle to save?

Research concludes that once women start saving into a retirement plan, there is little likelihood they will change their contribution, and the younger they start, the better. If most young people under 30 could elect to save 10 percent into their work retirement plans or personal IRAs, they should be able to retire at 65, the normal age of retirement. This campaign is for everyone, but by focusing on young women and girls these habits can begin forming early and banks can help educate an entire generation to become savings driven and debt averse. Why should banks support Save10? The overarching reason is very simple — what is good for women is good for business. Women are expected to have close to 1 trillion dollars in buying power by 2020, and 57% are heads of the household. Most of the private wealth that changes hands in the coming decades is likely to go to women. To ensure the gender wealth gap continues to close, banks must seize the opportunity to play a key role. The discussions around personal finance shouldn’t only look at what women are making and spending, but what are they keeping? In the United States, where women who work year-round earn somewhere near 82 cents for every dollar earned by men, it is safe to say there also is going to be a gap in their savings. There are already many apps, programs and online banking features designed to automate these functions, but have you made sure your customers know what you have or pointed out some savings bright spots from your customer base to others? One of the best ways that banks can support Save10 is by creating and marketing savings accounts to children, especially girls, that emphasize the importance of setting aside 10% and incentivizing keeping the funds in the account, growing over time. Simmons Bank launched its interest-bearing Save10 Youth Savings Account on Oct. 10, which includes an opening deposit match, rewards students for good grades, and includes a bonus for committed savers at age 18. Other banks can follow suit and offer savings accounts that act as “training wheels” accounts for retirement savings by matching the initial deposit, providing messaging that empowers kids to save 10 percent of gifts, allowance, and summer jobs, and encourages parents, friends, and others to “match” kids’ contributions. Banks are in a unique position to create, cultivate and share content that helps local women understand the importance of saving. Banks considering a content and branding strategy tied to financial literacy, including savings, as a way to differentiate themselves are most certainly playing the long game. ...What is good for women is good for business. Women are expected to have close to 1 trillion dollars in buying power by 2020, and 57% are heads of the household. Most of the private wealth that changes hands in the coming decades is likely to go to women.

Another reason to consider Save10 is talent. Banks typically have a majority of women in their workforce, so normalizing saving not only benefits bank customers, but it also benefits the majority of their teams. Supporting the women in your workforce by making sure they understand the importance of saving for retirement goes a long way and influences their loyalty to your company. Don’t get me wrong, there are many other factors in making a career choice, but a bank that empowers women to build a nest egg for after they hop off the career ladder is well on its way to building a brand advocate. A bank committed to teaching women healthy saving habits and backing a challenge designed to educate women and help normalize savings is a bank anyone can get behind. The bottom line is that what helps women build wealth helps banks make money.

For more information on the Save10 movement and/or the Save10 challenge, please visit save10challenge.com or email save10campaign@gmail.com.