Florida Banking September 2023

BANCSERV ENDORSED PARTNER: LIVELY, INC.

HOW HSA s HELP FINANCIAL INSTITUTIONS GAIN AND RETAIN COMMERCIAL CUSTOMERS F L O R I D A B A N K E R S A S S O C I A T I O N

BY ADAM BERRY, NATIONAL DIRECTOR, BANKING PARTNERSHIPS, LIVELY, INC.

E very so often, external forces require an industry to change. Presently, the headwinds of inflation, higher interest rates, macroeconomic volatility, a precipitous drop off in mortgage originations and shifting customer practices are bearing down on financial institutions. According to a recent report from McKinsey, bank profits reached a 14-year high in 2022, but only 35% of banks globally saw returns above the cost of capital. To weather the current environment, financial institutions need to reevaluate the way they’re doing business. This includes reimagining their customer journeys by offering new products that bring cross-selling opportunities, partnering with their commercial customers to help them better operate their businesses, providing a modern, digitized customer experience and comprehensive support. Partnering with a commercially competitive Health Savings Account (HSA) provider, especially one that meets and exceeds customers’ expectations for ease of use, can help financial institutions achieve these goals. How HSAs help financial institutions meet the current moment Customers, both commercial and retail, want to see something new from their current financial relationships. They want services to be simple, intuitive, digitized, and all in one place. They want personal, human, and responsive customer service, not a call center or chat bot, and they want a true partner in operations. They want built-in education to help account holders understand what an HSA is, how it works, and what they need to do to get the most out of the product. They want many of the things as business owners that they expect as a retail customer. In fact, the lines between retail and commercial customers are often blurred since 90% of small business owners keep their personal account at the same bank as their business account.

One way financial institutions can better retain, engage, and increase commercial business and win a larger share of their wallet is by offering a tech forward HSA. HSAs provide businesses of all sizes with many advantages. These include: • HSAs help businesses cut costs. Supply chain issues and inflationary pressure have many organizations looking to reduce their expenditures, and the cost of employing workers is right at the top of that list. A majority of employers expect that these costs will continue rising and the trend of high prices will persist. HSAs are paired with High Deductible Health Plans (HDHPs), which typically have the lowest annual premiums of the traditional health insurance options. The high deductible can give employees pause, but when paired with an HSA, the account provides an incentive for employees to choose the more affordable health insurance plan. That’s because HSAs give workers a way to save for the higher deductible tax-free. By giving employers a solution to increase adoption of their HDHP, financial institutions can help them lower the cost of employment, which helps them attract and retain top talent, while reducing operational costs. • Providing an enterprise-level HSA solution with automated functions like enrollment or payroll contributions can help finance and HR teams save time, reduce errors, and ensure a better employee experience. Many small and medium sized businesses have lean finance and HR departments. That means they need an easy way to manage their everyday operations. By offering an HSA through the same financial institution they already bank with, it reduces the vendors with which they have to interact and can help solidify customer loyalty.

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