Financial Wellness in Uncertain Times — A Canadian Perspective

Damian: On behalf of both Scotiabank and AFP I’m so happy to have all of you here. For those who I haven't had the pleasure of meeting, my name is Damian Jones and I'm the Vice President and Head of Global Transaction Banking at Canadian Commercial Banking at Scotiabank. And very recently appointed to the AFP Toronto Chapter Board. We have a phenomenal panel and we're going to talk about about payments and flows and widgets in the environment that we're in today talking about innovation at the cross section between employee financial wellness, risk management and navigating the uncertainty, it really brings together a couple very important themes for all of us. We have folks in the room from industry, we have finance professionals, we have folks from the community, we have valued clients and so there's something for everybody. I'm going to get us quickly into the panel today. I've already introduced myself, but I'll let Val, Seth and Rebecca introduce themselves quickly and then we will dive right into the evening. 

Val: Val Kugathasan, I'm our Director and Head of Innovation for International Money Movement as part of ADP Canada. A lot of the work that we do here as part of International Money Movement thinks about how to improve our clients’ payments experience and how we improve their client experience overall, because payroll really is just two very large payments, right? One from the employer and one from the employee. And at the scale that ADP operates, there's a lot to work with when we think about innovation there. I'll pass it over to Sean.

Sean: Thank you, Val. My name is Sean Paulseth, I'm Head of Revenue here at ZayZoon Canada with this new concept around Earned Wage Access, which we're going to get into a little bit. But thank you, Damian for the introduction and super excited to be here alongside partners ADP and Scotiabank this evening.

Rebecca: I'm Rebecca Young. I'm an economist with Scotiabank, and I'm going to try to add a little bit of clarity to the panel here. My title is a mouthful, but basically, I'm a long-term economist, which these days means next week, maybe tomorrow. I'm trying to figure out what's going on over the longer term versus day-to-day. Looking forward to the discussion.

Damian: As you can see, we have a lot of great perspectives, but we want to start with a quick icebreaker for all of you. Given the topic of today's session, can you each talk about your first job, how you were paid, and what you spent your first paycheck on?

Val: I'll start. I had two jobs that I worked simultaneously as my first jobs. One was at a game store called 401 Games in downtown Toronto; it's a board game store. And the other one was working at Tim Horton's. I was 16 years old and was making $7.00 an hour at that time. I was paid by cash and check, so if you can imagine the check came bi-weekly, I had to go to Scotiabank and at that time in 2005, Scotiabank told me you must wait 3-5 days for the check to clear. So when you think about the pay, I didn’t get paid bi-weekly, I got paid almost on the start of the 4th week if you think about the time for clearance. Then the cash payment on the other job was month to month, so this was very much on the memory of the owner of the store in terms of if they remembered I worked that day or not. Very, very poor payment experiences, but thankfully my only obligations at that time were just food, entertainment and hobbies, and so to that end I didn't have a lot that I had to worry about.

Sean: That's great. My first job, I was about 14 years old, was bedbug extermination. I didn't know what a bedbug was, I’d never even seen a bed bug, I didn’t even know what extermination meant back then, and on top of that, I was getting paid $15 an hour. That was the real allure for me, that's the best thing I've ever heard of. Little did I know this company also owned a few Money Marts, so often, the organization didn't have the cash flow to pay me, so I would then go to one of the Money Marts that they owned to then cash a check that they owed me. Little did I know there were all sorts of fees, and I got myself in a little bit of a hole at 14, as you can imagine. But that was the first type of experience I had with payday loans and suffice to say, obviously that business didn't do too well and is no longer around, thankfully. So that was my first experience which is quite interesting.

Rebecca: I'm feeling old. My job paid $5.00 an hour, or maybe I was getting ripped off, but the job was good. I was a lifeguard on a beach in rural Nova Scotia. Nobody swims except maybe one week of the whole season, so you get paid $5.00 an hour to hang out on a beach, except it was about 50 kilometers away. My paychecks were the paper copy, and you had to wait and you eventually got the money and you spent it in all on gas. Great job, poor pay but a good memory.

Damian: It's interesting, a couple themes. Look how far we've come right in terms of how we do payroll and then on the topic of inflation, Rebecca, I guess we are no strangers to increased prices, rising interest rates and layoffs, right? Those are some key themes. Can you tell us a bit about how the current market is and what you foresee changing in the lives of everyday Canadians as we move forward?

Rebecca: Some of us were having the discussion earlier and they were saying how as economists, you have to take out your crystal ball and figure out where things are going. These days it's more of a Magic 8 ball where you shake it and the answer is ask me later. So, I'll let you in on a big secret which is that economists don't know what is going to happen, but I would say there are three broad points when it comes to uncertainty, uncertainty and uncertainty.

1. The first uncertainty is uncertainty on forecasting. We know this year was supposed to be a victory lap for the world. Inflation was coming down, interest rates were cutting or were going to be cut further, and this was supposed to be the rebound. We're going to glide through and feel pretty good. Obviously there has been an uncertain policy mix that has mostly been negative growth-oriented, especially for the U.S. which has caught us all off guard. I think it's not only this weakening growth outlook, but also especially for the U.S. - tariffs are taxes that are inflationary. This toxic combination of weakening growth and high prices likely in the pipeline for the U.S. means that we're not likely to see interest rates coming down, especially in the U.S. outlook and that's the good case scenario where you're not talking about a recession.
2. I think the second uncertainty are businesses. You see businesses in this environment where we see slowing growth, interest rates not likely to come down, prices of everything that you may be importing increasing, including through supply chains, adding to pressures and demand might not be there. There are compressed margins where the cost of your business is high, uncertain, probably smaller demand or market on the other side of things. So, what we see, are businesses waiting, they're pausing, rethinking their hiring intentions, rethinking their capital investment or spending plans.
3. Then that third uncertainty is households. Households are incredibly insecure right now in terms of job security. When they answer polls on how they feel, that risk of losing their job if they're in a sector exposed to these trade wars, which is about 2/3 of Canadians, would say yes, they're worried about losing their jobs. So, we see that in their spending decisions: they're not buying houses, they're front run a bit on cars because worried about getting cars if there's a if the trade war goes on, but on net also just waiting. Then they're seeing these indicators of job growth slowing down.

And so overall, unfortunately, that uncertainty is likely to persist until we get closer to midterms in the U.S. We're looking at a year of pervasive uncertainty, a lot of change in that. But for a period, I think just we're going to be on recession watch. People are going to be worried. Is it going to be a short, shallow kind of sideways movement for economies or are we going to be facing something deeper? I'm sorry to start off on that note that's a little bit of how we see the kind of the next couple quarters unfolding.

Damian: I think with all the discussions that we have been having, it's a lot of scenario planning, right? Models upon models and building the models on top of each other.

Rebecca: To that point, adding to the uncertainty, we have a central bank in Canada that doesn't even have a forecast. They don't have the luxury as businesses have to have a baseline, they have to keep putting one foot in front of the other. But the Bank of Canada says “we don't know what will happen and here's one path that might happen. Here's another path, and we're somewhere in between.” And we also have a federal finance department that has also not set a baseline. They’ve said “wait, come back in the fall. We'll tell you what we think may have happened.” This compounds the uncertainty where you have even policymakers saying, “yeah, we don't know, check back later.”

Damian: And I guess we've even seen some public companies suspend guidance, right? So again, lots of uncertainty, but I guess Rebecca just to maybe end off on this one. What have you been advising folks as you speak to them as there is uncertainty? What couple things did you want to leave with the group here with based on what you've been seeing?

Rebecca: I think you hit the nail on the head with scenario planning. You have to appreciate that the next couple quarters, next couple years, could unfold any number of paths. There is quite a bit of complacency and let's hope that we're right. Let's hope that markets are right in terms of Taco Trump always chickens out and I think everybody's banking on that. The thing that I personally worry more about is that, yes, he might back out, but the way I interpreted Liberation Day is that he walked to the abyss, kind of looked over, and everybody got queasy so he backed off, but he's still walking beside it. I worry that this the rock is going to give way and there's going to be an accidental tipping. And we see that with the potential that he might threaten finance holding of U.S. assets of foreign nationals. So there's a lot of stuff that could suddenly break and I worry more of that accidental stuff. So all that to say, to your point about what does that mean when you look at things and scenario planning, but also not be too complacent that the world will look the same next year or five years from now. Think about what if we are in this longer term deglobalization with more resilient supply chains that you're not beholden to only one country or one product or one client. I know that's easier said than done.

Damian: It makes sense. And I think the one thing that we could all agree on whether your models say recession or not is that there is real impact on real Canadians. And so, Sean maybe on that point I wanted to come back to this concept of Earned Wage Access. You talked about your first job and payday loans, but tell us a little bit more about Earned Wage Access, what it is and for those who aren't familiar, and the impact it can have on employee financial wellness and business performance.

Sean: Absolutely. So Earned Wage Access is a concept that’s essentially on-demand pay. The ability for employees to access a portion of their earned wages as they go through their respective pay cycles. We think of pay cycles and payroll as biweekly or monthly, and this is how we've been doing it for decades. But there's now technology that allows employees, and empowers them, to access their earned wages right away as they've actually earned it. We’re a Canadian company but launched this concept in the U.S. about 10 years ago, and we recently launched back here in Canada in July 2024. When we think about traditional payroll cycles, the reason why we continue to do the traditional way of bi-weekly or monthly, is due to payroll, cash flow constraints, banking and a number of other reasons. But there's now this type of technology that can embed itself into companies respective payroll to empower and allow employees to access their earned wages. We think a lot about financial wellness and before we launched back here in Canada, we did a tremendous amount of surveying and research on whether this is this a good time to launch EWA and, alongside Scotiabank, we were able to extract a lot of data from working Canadians. What they said is 56% of working Canadians today still live paycheck to paycheck and 2 million Canadians still use payday loan services. For context, there's about 1,400 Starbucks across Canada and there's about 1,400 Money Marts and payday loan services across Canada as well. They're on the corners and they’re taking advantage of Canadians. I think this is a product of what's going on in the market, in the market of uncertainty, not to mention the tariffs and this is what's impacting frontline workers way more than the executives. All of this uncertainty is continuing to impact employees but is tough to diagnose from an employer standpoint, the reason being because employees don't feel comfortable going to their employer and saying “hey, I need an advance.” I don't think that happens very often because a lot of people feel embarrassed. These types of things are often a silent issue and that's why these things like payday loans and these other types of services exist because employees are not letting their respective employers know that this is going on. Now what can this lead to? Well, financial stress can lead to productivity issues, retention issues, employees might just go up and leave, they may be having issues with their family because they can't afford certain things right now with inflation. There's a number of things that can have a ripple effect that is often hard to diagnose and see from an employer standpoint. Giving the employees the ability to access their earned wages throughout their respective pay cycles allows them to fill the void a little bit, to buy those groceries on the way home, to buy that gas for their family or maybe it's their respective job and they have to drive. So financial wellness is a very broad term, but we find that financial stress is behind a lot of these challenges that companies are seeing today because they don't have benefits that adhere to the front line, they’re benefits that adhere to the executives. We want to make sure that there are benefits and programs for everyone because they are the ones that are really feeling this economic uncertainty and having issues.

Damian: A lot to unpack there. And it's one thing to talk about the segment that is impacted, but it's also to think about the actual impact to the employers, right? From a wellness perspective, from an engagement perspective and you touched on productivity and retention. That doesn't often come up, I wouldn't intuitively think about retention or productivity benefits with employee flexible payment options like EWA. So, from your perspective, how could we quantify what those benefits as people start to think about these things?

Sean: Absolutely. Because we launched in the U.S. about 8 years ago, we've extracted a lot of great data from organizations that we've worked with. For employee satisfaction and employee experience, this is quite hard to quantify as an employer and organization. So how can we do that? Well, when we did our research while we were launching back here in Canada, a lot of the working Canadians that had been surveyed had said that they feel like the onus is on the employer to provide financial support, financial wellness and financial education. So that expectation is there. If an employer feels like they want to invest in their employees with something like EWA or other types of benefit programs that adhere to that segment, that can have a tremendous impact on things like productivity. I'll give an example. We're working with a hospital and healthcare system out of Vancouver who came to us and expressed that a lot of their frontline staff have two jobs. It's expensive in Vancouver to live, things are getting very expensive, the gig economy is big there. There are all of these different things that they can be doing on the side. They said if they had something they could use to access their earned wages on the front they wouldn't need that second job because they just need to take out that prospective money that they've earned in their monthly pay cycle to pay for everyday things, whether it's groceries, gas, things for their kids. When we went live with this respective healthcare organization, we immediately saw a dip in people surveying back saying they didn't need that second job anymore and they can spend more time at the hospital job. They can be more productive, more engaged and create a better experience. The employer is investing back into their employees, and it's had tremendous impact and engagement. It's these types of things that you don't think about that could have an impact, but when it comes from a productivity standpoint, now these people are now taking a second shift as opposed to a first shift. They want to work there because they can take out their money right away. There’s been increased shift uptake, which is something we see in the healthcare industry, and that leads to better retention, better turnover. We see a reduction of turnover up close to 29% after we've gone live with earned wage access and this is a voluntary benefit for organizations to offer. Now can I sit here and say that's 100% because of the EWA? No. They're doing a bunch of other great stuff with their employee experience, great payroll software, great banking partner, all of those things toe the line and work together to impact things like turnover. But I think it's that productivity, it's the employee satisfaction, it's that experience that you're investing in everyone as opposed to just a specific segment in an employer that can have those tremendous impacts.

Val: That's a great point, Sean. One last thing I'll add to that is that using something like earned wage access can lead to better attendance management as a byproduct as well, because time and attendance systems often feed into innovative solution like this. It's an aspect of employees having to be on time to start that shift work because that effectively, serves as the catalyst for something like earned wage access. But when we think about this from the payroll industry, I want to look at this capability, right, earned wage access or any other innovation, as part of payroll innovation as a net growth and kind of expansion of the type of benefits that we have today. There are examples of where we've given employee empowerment and choice through customization of benefits. But it doesn't just stop at the nature of employee benefits, for example, bonuses are also subject to an element of employee empowerment in the sense of you can pick how your bonus gets distributed. There's choice. So, when we think about your pay, your core pay that comes in biweekly or monthly, that is really the last vestige of someone's benefits, you're providing that as part of their compensation, that has yet to be turned into the same level of flexibility that we've given across the other layers of employee benefits. Some people are OK with like the lack of choice, but I think in some other ways, you know, when we look at pay, it becomes the last vestige for where we haven't really provided a ton of choice. That lack of choice comes from the fact that all these other levers have flexibility built into them because of how they've been built. For example, benefits don't sit with the employer, they sit with a third-party company. Your RSP and payments don't sit directly with the employer; they're scheduled payments that sit with a third-party company. So, everything but your pay sits mostly outside of your employer structures just supported by one-time payments through your employer. So, there's a lot more choice that can be provided in that in that layer. So, if you think about Earned Wage Access or any sort of payroll innovation as part of that last component of your biweekly or monthly pay. The rationale for why we haven't gone to such a flexible model is because of the structures that exist as part of your employer today. The liquidity concerns, cash flow management, the ability for your employer to potentially have to not do these one-off cycles based on employee need or even an aspect of not understanding those employee needs as well. But coming back down to it, as I look at this from a payroll perspective, we've done it across the board. Everywhere else we've given employees choice around how they want to manage and maintain their financial wellness. And I think the only thing that's preventing the pay from not having that same level of innovation is that it's completely owned and restricted by the employer until now. So that's my two cents from a payroll perspective and how we're seeing this unfold across the economy.

Damian: Innovation is in the optionality that's provided and that's what I keep hearing and that's what people are looking for like in uncertain times, more options and the customizations. That optionality brings the engagement; it brings the retention that you're looking for and I think that's the type of innovation and type of thinking that we're bringing your mind to today. I love the way the discussion is going and I just want to pivot a bit and come back to Rebecca. And as we talk about these innovative solutions that we talk about optionality as it relates to payroll and payroll solutions, how do you see labour and the payroll landscape evolving over the next five years and what should businesses be preparing for?

Rebecca: That's a good question because connecting to the short term, we're going to be hearing a lot about job losses and unemployment rates. So, in the near term we're going to have a negative picture about having too much labor. But I think looking over the five-year horizon:

1. The first trend I would say is the last of the lifers. In five years, in 2031, the last baby boomer turns 65. So over this five-year window, one in five in the Canadian workforce is going to be retiring so there's a big shift. These boomers who looked for stability and security and tended to stay with one company over the course of their life, constrast to the up-and-coming generations that move around a lot. So that's one trend we're going to have: a mass exodus out of the labor force.
2. And related then is this is talent scarcity. If you look at things like the dependency ratio, when those boomers entered the labor force, there were seven of them for each dependent, either young or old Canadian. Over the next five years, we're looking at that approaching two. So, two workers in the labor force for every one that’s not. That's now another big shift where companies are going to be really competing over a limited or a smaller shrinking pool.
3. Another third trend in this is related to innovation is that it's not just competing over the same kind of human talent, but automation and AI are going to be really big. We don't know which jobs are going to be redundant. More importantly, I think it's going to be which people can really embrace AI and have both the technical ability to use it and also the emotional intelligence or the human touch.
4. A fourth trend I would touch on then is this idea of lifelong learning. We're increasingly out of this world where you study something at university for four years and then you work for 35 years. The pace of change in the workplace is exponential in that, increasingly, Canadian businesses have not yet even started to touch on kind of microlearning or micro credential, and I think we still rely on this model of government or academic others should be doing the training and I think we're going to see more emphasis on that.
5. The final point, just to bring it full circle back to paycheck and the boomers leaving, is that over the next five years we're going to have a whole other demographic entering the labor force. If you think about the boomers as “duty to work”, the Gen Zs view work as a platform, not a place. They’re just starting to get into the workforce. The millennials and the Gen Xes we wanted the work life balance, we wanted purpose and meaning to our world, so we tend to make a mistake of thinking that's what younger people want. In 2031, the first Gen Alpha is going to be entering the workforce, and I think this idea of seeing well beyond the paycheck when you look at how you motivate, reward, and inspire talent, it is a mosaic. We're going to have these five generations in the Canadian workforce and we're going to need all of them, including the older generations training the younger ones.

I think a lot of a lot is going to change over the five years where if we are just focused on tonight or tomorrow, we risk missing those longer-term changes.

Damian:  Lots of balancing from the longer-term perspective and all those dynamics. Now just coming back to you Val, while on the same topic, you guys (ADP) are at the epicenter, you see so much happening across the payment landscape and so I want to ask you a similar question as you guys look five years out, what's your perspective? What how do you guys view it in terms of the landscape and the evolution of the landscape in five years?

Val: That's a great question. How many folks have heard of open banking? Vast majority. How many folks have heard of real time rails or real time payments? Also, vast majority. And I know there may be some cynicism amongst the fact that we've heard of some of those concepts for the better part of the last decade and when will these things arrive? But I think what we're seeing in 2025 is that in the absence of true open banking framework, and the absence of real time rails that has been launched through the Payments Canada network, there are actors in the system that are simulating the need for businesses to move down that journey and doing that type of processing and delivery of those types of capabilities for all sorts of use cases. When we think about those trends that Rebecca mentioned, those five trends. I think the trend from a payments and payroll perspective is that no longer do we want to wait for something like that to materialize and we've started to accept the fact that those structures will arrive at a certain point. It could be within the next 12 months; it could be within the next 24 months or maybe longer. Or maybe when they do arrive, there's an aspect of an evolutionary build, how they start and how they will mature over the next decade will look different. But while those things are happening from a structure it's very important that we as Canadian businesses and Canadian payroll organizations as well as Canadian fintech companies need to govern and effectively need to deploy the types of solutions that make sense for us, right? To that end there are companies that have come out with solutions like Guaranteed EFT. This is something you guys may have heard of, it’s a variation on EFT funds, but effectively, a contractual guarantee that supports the two parties and facilitates a mimicry of real time payments. There is the fact that Earned Wage Access itself is mimicking a real time structure through Visa Direct and MasterCard Send or E-Transfer as an example. There's Interac that's launched E-Transfer for Business, which has raised the limits to $25K and allowed businesses to start going away from cash and checks and starting to use that capability more and it's just a matter of time until these types of things are productized and built that can serve a vast number of use cases. So, to kind of answer that question, I think in the next 5 years, we are going to see a massive evolution of what B2B payment services and B2C payment services look like based on those actors coming into the marketplace. What we will find is, whether it's Payments Canada or the federal government, that we need to act quickly to start enabling those services for those actors and for the constituents in the market to be able to make their systems that we end up using or effectively maybe risk actors that must build systems around those systems potentially. So to that end, what does that mean from a payroll perspective? It really means that liquidity becomes a non-starter concept. You don't need in real-time structures, you don’t need to plan for those types of events, you can effectively expect and receive and send and have that settlement happen in near real time. I think that starts to ask the question around “why isn't all payroll real-time potentially?” I think those types of bigger Fortune 500 companies will start to ask the question of what are free-funding windows? Why do we have them in a real-time environment, especially in a mature real-time environment, right. Treasury functions will start to have to figure out how do you make sense of that environment and bring that into our operations. What is starting out as an industry of Earned Wage Access may eventually become part of a payroll structure within the next five years.

Damian: It's exciting to think about, but also sobering to think about how do we prepare ourselves and then how do we scenario plan right? That's what resonates with me. So quick one before we do before we do audience Q&A, I wanted to ask if there's one thing that you want to leave folks with on what they should be thinking about, what insight should they be going away with and what they should be actioning when they leave this room? And I'll start with Rebecca.

Rebecca: I'm going to put a macro lens on it and apply it to what I've heard some of my colleagues say, but one is to no buy in to one narrative when you're thinking about your employees. Employees are a diversity, kind of like a mosaic, especially when we look across demographics and generations, we tend to have an unconscious bias. We think of how we were brought up and that everybody must feel that way. Some of you were also pointing out the precariousness of many Canadian financial households and I think when we look at the aggregate data, that does bear out and we've had this inflation shock, that again don't buy into one narrative, and don't make assumptions as to what individuals want or need at a given point and or what they need over time because that also changes. So having some not just optionality in a sense of a “must have”, but actually as a strength.

Sean: I think just building on that point, I think it's super important for organizations to look at their workforce and understand it. I think oftentimes you see these organizations rolling out benefit programs for a certain segment or age group, and they don't think about the frontline workers, they don't think about the Gen Zs, they don't think about the new generation. How do you attract and retain them? They may not have any idea. Is it EWA? Is it other? It's probably not just a pool table in their office, right? Like there's a lot of new things out there that they can think about. But step one is always understanding your workforce. Who are you trying to attract? Who are you trying to understand? There are new generations coming in here. We're a very diverse country. There are people from overseas coming in, what do they care about? Have a very good understanding of your employees before you think you can roll out something that is going to impact employee well-being. Does it impact employee experience. So, I think that's step one. Before even think about EWA or any type of innovation, you've got to really understand who these new generations and how you can impact them and that's going to take some time. Maybe it's surveying, maybe it's data, but I think it's so critical to do that before you think about rolling out anything around employee well-being.

Val: Those are great points. I'm going to once again build on what these two are saying here. And I think the theme is really separating the signal from the noise. But what I think I'll add here is that not everything has to be super complicated. As an example, one thing that we do really well at ADP is try to take a pulse of our customers every year and we ask the questions around what's important to them, what type of payment capabilities would they like? What type of services would they like? What are the types of things that would enrich their customer experience? And I think to Sean's point, those are things that we need to be asking of our employees, of our internal business customers, and trying to figure out the types of services that would help strengthen our organization. To that end, really just to echo the points made here, but also to kind of take it one step lower and not make everything super complex, but start with an aspect of engagement, start with an aspect of that survey to understand your constituents, your employees, your customers and I think that will illuminate that kind of signal and help you understand how to prioritize and what to focus on.

Damain: I think it's a great point to pause and again, show some of you may have questions. We've talked about so many different things and hopefully it's peaked your interest quite a bit. We'll open up for a couple questions from the audience.

Question: Question for Sean. If you looked at the perfect candidate for EWA, what would that organization, broadly speaking, look like?

Sean: When we think about industries that we've had an impact in the U.S. before we've been launched here in July 2024, is that there's a lot of similarities from the U.S. standpoint of the challenges we solved for. So we look at industries such as healthcare, another story that I mentioned about homecare and how you can empower your employees through earned wage access. Healthcare is a big industry that we're seeing a lot of traction as well as here in Canada. I think any industry or individual where you're trying to attract talent or newer talent, like retail where there's a lot of younger folk and younger populations that are going to be working in those frontline roles, they want that instant gratification. So, anything with that younger population. And then I would say broadly speaking hourly paid positions. Where are there large hourly populations? Because they're the ones that are struggling. They're the ones that are feeling the pressure from these economic times in this climate. So, let's think manufacturing, let's think retail, franchise restaurant. But a use case in a restaurant, attracting someone who's younger and who wants access, may be different than someone who's much older, who has a family at home and a manufacturing plant and says, you know what, “I just need this money because I need to pay and put food on the table.” So we're seeing different use cases. We're seeing it reflective of what we've seen in the U.S. a little bit in terms of who that person is and who's going to leverage it in the best way. But it's in those similar industries, the retails, the call centers, the hourly segments that were having the most profound impact today.

Question: From the corporate side, since we looked at the employee perspective, what would be some of the considerations and your recommendation there? Traditionally corporates would fund, say an ADP, two days in advance for a batched EFT payment, but now they have to do it on a real-time basis. So do you have something that you have come across, in terms of challenges, with explaining the benefit and the cost of implementing this kind of a solution from a corporate perspective.

Sean: I think a big piece of Earned Wage Access whether it's a ZayZoon or other providers out there, is making sure that it's applicable to more than just one payroll. More than just one of those large substantial payrolls out there. There's a lot of small businesses out there that may have another homegrown payroll. So a big piece of Earned Wage Access, at least from a ZayZoon perspective, is ensuring that we're very much sticky with pretty much any type of payroll and time and attendance. We want to make sure we're analyzing the time and attendance software as well as payroll to ensure we’re being as accurate as possible. So I think a big piece of what we've done from an employer standpoint, is work on the product from an integration standpoint, because we're not a payroll platform by any means, but we want to make sure that we're able to integrate through APIs, which in this day and age, it's easier said than done, of course. But that's something we've really worked on as an organization to ensure that we can adhere to different payroll systems across the U.S. and across Canada.

Val: I'll add just one more point to that. Most Earned Wage Access, I would say like the vast majority of the larger Earned Wage Access players whether it's a ZayZoon or others, have no impact to your existing funding structure for regular payroll. So there's no change in that aspect in terms of cash flow management, liquidity, any of the pre-funding. All of those structures stay exactly the same. So I think it would be very unique if there is a provider that is asking for those structures to change potentially. But I would say in my experience, the vast majority of established Earned Wage players don't make any changes to your status quo.

Question: Something that Rebecca said as you prepare for a generation alpha to hit the workplace, and I heard linking with Damian innovation. So Roblox is a is an option that you'd like your currency to come in. So what I want to ask you, Val is with all the uncertainty on the horizon when you look at innovation how do you approach that?

Val: I think prioritization. I'll go back to the whole signal and noise aspect. While you could in theory give customers a lot, there are acute pain points that businesses are facing today. I think it's incumbent on us to figure out if we want to build by our partner to solve those problems. I think that's the starting point and then figuring out, even in a large like ADP, that we can't solve every single problem that exists structurally as part of the payments ecosystem or even the information ecosystem. And so how do we figure out based on what our customers want, based on the existing environment today, and based on our own prioritization of initiatives of what, how we would like to build by our partner when those when those three different considerations come together. Relative to the broader payroll industry, by ADP doing something like that, we would effectively cover the largest footprint in North America by doing something like that. So in saying that we can have measurable outcomes of an innovation like that, putting that into place, seeing the results and being able to take that and build on top of it. So that I would say is the last consideration beyond the ones that I've mentioned, which is that is that innovation that we're looking to do a stand alone or is it something that we can kind of wrap around and continue to build as part of a value chain that's connected from the start of the payroll onboarding to the end of the life cycle. With those kind of different considerations into play you'll find that very few initiatives meet the litmus test of being able to cover all those grounds. But in the right context, you should be able to work with each of the levers that I had mentioned there, especially in the aspect of build by our partner. I think we're in an age now where you don't have to build everything in house. You don't have to go out and make massive acquisitions, large established partners. So it is a very rich time to kind of bring that thinking process and figure out what initiatives make the cut.

Question: When we're talking about financial well-being a wellness of employees, we're really talking about financial wellness of all Canadians from multiple generations. We obviously have a new government and if there was one policy initiative that you would ask or you wish the government would take to enhance financial well-being of Canadians, what do you think it would be?

Rebecca: We've given that a lot of thought in the economic shop, because even prior to the Trump trade wars, Canadian growth has been pretty abysmal. So we've been looking at how do you get Canadian growth stronger and then you dissect what's been going on in the economy. And one thing is that we're a big consumer nation and the U.S. is even bigger. We're a bit complacent that US 70% of their GDP is from kind of near-term gratification and in the Canadian context, it's over 60%, so we are just consuming stuff, we're not investing. I think what our new Prime Minister is trying to do is give more opportunity that if you had a dollar and you had choice, are you going to consume now or are you going to invest later? He wants to create more investable opportunities. By bringing that to the level of Canadian household financial security, it's pretty abysmal. When you dissect the biggest asset Canadians hold when they reach retirement it’s housing, but the housing markets right now are unaffordable for a younger generation. So, I think we need to think about that realistically and not say by building half a million homes which is unrealistic. We need to be having a frank conversation that if if housing affordability is permanently eroded, how do you get that Gen Z saving a bit of their money and saving $5K a quarter million for down payment. You get them to start small and build equity outside of housing or eventually within housing. I think that having that frank discussion about how Canadians achieve financial security over their lifespan that's not just based in housing is a big one, but related also to consumption. We need to think more about how do you get that mentality of investing in the future, not just in the near-term and I get there's a necessity aspect as well, so you have to be really careful that there are subsets of the country that are really hurting. You can identify them, it’s the renters, it’s the single adult households. And the difference is you know that household lands at 65 with like $10K networth versus the two income homeowner household that you know arrives with one and a half million. I think know there's a lot of things I would fix. I couldn't land on one.

Sean: I'm just building on that a little bit. We did a lot of financial wellness surveying and research before we even thought to broach into the Canadian market and I feel like financial education is something that's not really widespread for people. I don't think the average person knows a lot about budgeting so how can we create a culture of our education is a lot more prevalent, I think at an earlier age.  I think that would be ideal. Is that realistic? I don't know. And then I think the Ontario government has started to squeeze the interest rates for payday loans quite a bit. So you can only take out a certain amount or hit a specific point. They need to continue to do that because that's when those people will get in those debt cycles and it just will spiral out of that. So I think the more they focus on those type of predatory types of services is super helpful for the people that are on the front end that are feeling the most pressure. And then I think a culture of financial education is something that we should focus on.

Rebecca: If I can just pick up on a couple of the policy gaps in financial security we're seeing within the workplace. I talk about diversity, but you do have a subset of the boomers that are on mostly defined benefit if they're still with their lifetime job. But we were not seeing employee sponsored pension plans keeping up with the growth of the labor force. We have a lot of people in some of these more vulnerable sectors that know don't have that same security that comes with pension plans. There are a number of gaps I think in the policy sphere that we should be addressing.

Val: The last thing I'll say to this is when you have everything that is so expensive these days -  you have housing, inflation, consumer goods, every single thing is expensive - there's very little left to invest. From that perspective, I think we need to start thinking about how do we look at the portfolio that Canadians have outside of their day-to-day paychecks and structural things like their RRSPS? So as an example, and I don't know if Rebecca will agree with me or not, but I think a lot of Canadians that are saving, even a little bit, have a substantial amount of money sitting in their RRSPS, but that is capped in how they're able to utilize those funds even for something like a home purchase. When something like that is used, you have to then repay it back over a 10-year period and fund that bucket again. While I think that has good intentions behind it, it's effectively a very restricted use of the largest asset that you would have as a as a working employee. So being able to unlock that and being able to use that in a much more productive way and invest back in the economy or invest back into property would be a starting point as well.

Damian: I feel like we have a think tank going right now. Did I promise you a treat or what?  I really want to thank all of you. So Rebecca, Sean Val, thank you for what I have found has been just a fascinating conversation. But also, there is real impact, right? And we all have to be thinking about that, whether we are a treasury professional, whether we are in industry, whether we have a business. We have to be thinking about the real impact and what people are feeling right and thinking about the things that we need to invest in, the insights we need to provide and the things we need to start doing now proactively. Think about the way that things will evolve short-term to long-term. So I really want to thank all of you for being her.