Would you want your bank to know how many steps you’ve walked today, or whether you got around to going for your weekly jog?
You’d probably think it was none of the bank’s business – but what if it was promising you vouchers or cash to reward you for taking a certain number of daily steps or hitting your exercise targets?
Welcome to the new world of ‘wellness banking’. The idea is to encourage customers to spend responsibly while improving their physical and mental wellbeing.
Privacy concerns: With two wellness banks launching in the UK this spring, could signing up to one make you healthier and wealthier – and is it worth giving your data away?
So each time you make a healthy choice, such as exercising, buying wholesome foods or meditating, a wellness bank will reward you with vouchers, cashback or discounts.
To benefit, customers must share more personal data with their bank than ever before – allowing it to track not just their spending and saving but information such as their daily movements, exercise and diet, gathered via a smartphone with internet access. The more you’re willing to share, the more rewards you stand to receive.
With two wellness banks launching in the UK this spring, could signing up to one make you healthier and wealthier – and is it worth giving your data away?
BIG BROTHER BANK
Our banks already know a lot about us — where we live, who we live with, who we work for and how much we earn.
They also know how much our mortgage or rent payments are, what we spend on bills and how much we save.
The pandemic has accelerated the use of debit and credit cards – with 18 per cent more spent using contactless payments in September 2020 compared to the previous year – meaning it is increasingly easy for banks to profile our spending habits, too.
Paying by card gives banks data on what we buy and when. Tom Andrews, of data monitoring service Rightly, says spending data could even show your bank if you were drinking too much or if you were unwell.
He says: ‘Banks collect and store lots of data for a very long time – although this is mainly because strict regulations mean they have to.’
The pandemic has accelerated use of debit and credit cards – with 18% more spent using contactless payments in September 2020 compared to the previous year
Open Banking now means customers can give permission for banks to share data with each other. For customers with accounts at more than one bank this is helpful because they can see all of their financial information in one place but, of course, so can the banks.
Some banks, such as NatWest, let customers add store loyalty cards to their online banking account, which also carry huge amounts of data about our shopping habits and typical purchases.
Most smartphone banking apps, including Tesco Bank and NatWest, have a ‘nearest cashpoint’ feature, which works only if you give the app permission to track your location. Banks can use this and card spending data to log where you are and what places you typically visit.
Often, this information is used to help stop fraud. So, if the bank knows you normally buy coffee in central London on a Monday morning but your card is being used to buy a laptop in Manchester at that time, it could flag this up as a suspicious purchase.
But all this data also helps banks profile their customers — which could be useful when it comes to targeting them for new products, such as loans or credit cards.
‘Banks are acutely aware of the value of the data they hold — and how it could be used,’ adds Mr Andrews.
There may be stronger links between our health and financial habits than we think.
Research from Coventry Building Society found 90 per cent of people who exercise at least once a week also put money into their savings each month, compared to 74 per cent of those who don’t exercise.
And the more often we exercise, the more we’re likely to save – people who work out daily save an average of £234 per month, compared to £158 saved by those who exercise less than once a month.
Data like this helps banks understand our saving habits and gives them valuable insights into which people are likely to be the best customers.
Research found 90% of people who exercise at least once a week also put money into their savings each month, compared to 74% of those who don’t exercise
A recent Deloitte report told financial companies there was a ‘sizeable opportunity’ for them to profit from health and wellness initiatives, especially if they presented these as ‘enablers of social good’. People are more interested in tracking their health than their finances, it added.
Companies can take advantage of this by including health monitoring within a finance app – which allows them to access information about our spending habits, too.
The Covid-19 pandemic has heightened our awareness of how closely financial worries are linked to mental and physical wellbeing, according to a Global Wellness Summit report which names ‘financial wellness’ as one of the top health trends for 2021.
But some critics question whether wellness banking is really designed to improve our health, or if it is just trying to help firms collect more information about us.
‘Being able to combine health data with spending data for an individual creates a wealth of information which is extremely valuable to companies who are trying to sell us things,’ says Mr Andrews.
He adds that data about our typical activity levels, exercise routines and even our favourite jogging routes helps advertisers target us more accurately. It also means firms can build up detailed profiles of us, which can be sold or shared with other businesses.
CAN YOU BENEFIT?
Both of Britain’s new online wellness banks insist they will never share or sell health, fitness or spending data with third parties.
Launching this month, the Longevity Card comes with a Mastercard debit card and a smartphone app, which analyses data on customers’ activity levels from wearable devices, such as a Fitbit or Apple Watch (you have to buy your own).
Customers get points – which can be converted into vouchers or cashback – for transactions including using their card or setting up direct debits, and for meeting exercise goals, such as walking 10,000 steps a day or burning calories. Users can also get discounts on health and fitness goods and services.
Another wellness bank – due to launch next month – is MasLife, which is also managed by a mobile app and comes with a prepaid Mastercard card.
The basic account is free but customers using its £10-per-month premium service can earn points for ‘responsible spending, meditating and exercising’, which convert into discounts on health, fitness and lifestyle brands.
Backers of wellness banking say it is time the traditional model was updated to reflect the challenges of modern life
Other health features include inbuilt step and calorie counters, guided meditation sessions and wellbeing webinars.
If you’re already spending money on health and fitness subscriptions or equipment, or using a smartwatch to monitor your step count or workouts, then signing up to a wellness banking service could make financial sense.
It means you’ll get discounts or cashback for doing the exercise or buying the products you already planned to anyway.
Or if you feel like you need motivation to improve your health, then the rewards might just inspire you to get off the sofa.
This concept is already used by health insurer Vitality, which gives customers an Apple Watch for just £37 upfront, among other offers, if they keep up with weekly activity targets (which are monitored via the smartwatch).
Knowing how active we are benefits insurers because it helps them get a more accurate picture of our health. And giving us incentives to exercise means we are also more likely to stay well and less likely to make a claim.
Backers of wellness banking say it is time the traditional model was updated to reflect the challenges of modern life.
Although High Street banks are yet to directly combine managing money and health, some are starting to acknowledge the importance of customer wellbeing.
Lloyds, for example, posts meditation and mindfulness videos on its website and has partnered with charity Mental Health UK to offer money management tips.
Sergey Balasanyan, the 29-year-old founder of Longevity Card, says all banks need to be better at supporting the wellbeing of customers. His app contains advice on how to seek advice and support.
He says: ‘We have a responsibility to protect our customers’ mental health and provide them with preventative resources. This is the ethical way to do business.’
Founder of MasLife, Kash Amini, believes his product will take users on ‘a journey of self-development… to help them reach their full potential in life’. The former cryptocurrency investor, 31, is launching the bank five years after losing his fortune from ‘living a fast life of partying and trading’.
Having been inspired to change his lifestyle and mindset, he wants to share his approach via his wellness bank.
So, could wellness banking work for you, too? Ultimately it depends on whether the deals you’re offered are good enough to motivate you to live healthily — and how happy you are to let companies access reams of your very valuable data.
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