How to Supercharge Digital Banking with Payroll Data

Blind spots hinder banks and credit unions from providing reliable financial advice in digital channels. One of the biggest gaps is that FIs see only the portion of a worker’s paycheck that is deposited—after deductions for taxes, retirement, and benefits. Fintechs such as Argyle, Atomic, Flinks, and Pinwheel are jockeying to provide FIs with “real time” payroll data that includes employment data and a full picture of money in and out. Today, FIs are using payroll data advantageously in areas such as account opening, digital lending, and money movement. This report focuses on the next frontier: financial fitness. Payroll data will address blind spots about how much money workers allocate to retirement and company benefits, taxes, loan payments, and transfers into savings and investments outside the bank. This data will be especially attractive to FIs that are intent on providing foresight—not just hindsight—in three intriguing areas of opportunity:

• Sharpening cash flow forecasting for paycheck-to-paycheck workers 
• Proactively offering short-term loans 
• Building a bridge to investing

Key questions discussed in this report:

• What kinds of information could FIs mine from payroll data?
• What are the immediate applications for payroll data?
• How could FIs use payroll data to develop innovative financial fitness insights, gamification, products, and services?
   

Companies Mentioned:

Acorns, Aise, Alchemy, Alloy, American Express, Argyle, Atomic, Bethpage Federal Credit Union, Block, Bond, Bottomline, Citizens, Credit Karma, Curo, Dave, DMS, DoorDash, eCU Technology, Empower, FinLocker, Flinks, Galileo, GDS Link, Georgia United Credit Union, H&R Block, Huntington Bank, Informative Research, Informed, iThink Financial, Jack Henry, Juno, Lake Michigan Credit Union, Maxwell, MoneyMart, MortgageFlex, MX, NCR Financial, Paybright, Pinwheel, Plaid, Propel, Provenir, Rover, SimpleNexus, Spring Financial, Stripe, SupportLink3, U.S. Bank, Uber, Visa, Wealthsimple, Wells Fargo, Wise