Being a financial educator to your customers has never been more important than it is today. Consumers are starved for helpful tips on budgeting and building wealth. And, while statistics on financial literacy are often discouraging, it leaves the door wide open for your organization to meet the growing need for financial literacy. A FICO 2014 Survey of U.S. bank customers found that only 30% of financial institutions’ customers received a passing grade on their financial knowledge.
It’s no surprise that younger people were less informed than the older generations. Those who were satisfied with their current financial institutions also answered better than those who weren’t. The study showed a correlation between financial literacy and better customer engagement, more use of services, and decreased likelihood to switch financial institutions. What better reason to ensure your current and future customers have the tools and information they need to make informed decisions about their financial future? Although rate is an important consideration, providing value is also key to retaining your valued customers.
The important question you should ask yourself is: Are you doing enough to deepen your customer relationships?
Today’s complex financial services market offers consumers a vast lineup of products and providers to meet their financial needs. The degree of choice requires consumers to equip themselves with the knowledge and skills needed to evaluate the options and identify those that best suit their needs and circumstances. And often times, that can be overwhelming and scary.
For example, a first-time homebuyer may need advice about home financing and/or mortgage counseling. Younger consumers may need information and advice on banking transactions, budgeting, saving and investing, and using credit wisely. More seasoned consumers may need information on annuities and other investment options as they transition to retirement, and small-business owners may benefit from educational programs that discuss how to handle credit or budget for their new ventures.
To help you get your customers up-to-speed on everything financial, here are some tips to keep in mind.
1. Keep Up With Technology Trends
In 2014, Customer Feedback Insights Group (CFI) found that customer satisfaction was greatly impacted by the ability to follow trends set by the market. In its Credit Union Satisfaction Index, CFI recorded online and mobile banking as most important to a customers' experience. The index found 89% of respondents ages 18 to 49 and 80% of respondents age 50 and above conducted at least half of their banking on the go.
While it is necessary to have excellent customer service and in-branch banking options, loan and credit card payment options are critical. Giving borrowers the ability to make payments in-branch, online or via mobile is the name of the game as your growing customer base leans toward a self-serve preference. Reaching your growing customer base now requires accessible informational resources on your website, online banking portal, and mobile. Develop topics with easy-to-understand resources such as tip sheets, guides, short videos, tutorials, and anything else your customers may find valuable.
2. Establish Yourself as a Thought Leader Through Online Content
Providing your customer the products, tools, and information they need to achieve their financial goals can be a real positive for customers—especially with the younger crowd, who may be at the beginning of their financial journey. A survey conducted by Go Banking Rates found that 62% of Americans have less than $1,000 in their saving accounts. Only 29.1% of millennial savers had accounts with balances over $1,000.
Not only does offering information position your financial institution as a hub for financial experts, but it gives you the opportunity to meet the younger generation of customers online where we know they are and build a promising financial future.
3. Use Your Community to Help Get the Word Out
To truly own financial literacy, however, more is needed. Financial institutions need to get even more involved with their communities. Strive to become part of the strategic architecture of your community’s financial literacy efforts.
Look around and reach out to unlikely partners—nonprofits, local government, other cooperatives, farmer's markets, food banks, asset-building coalitions, etc.—who have complementary missions around financial capability. This will provide the opportunity to increase your name recognition, information outreach, and customer base.
Host an educational session for your customers with varying monthly topics. This will reinforce that you care to go the extra mile in showing your customers that you care about their financial well-being.
4. Remember, What Benefits Your Customer Also Benefits You
Financial literacy is key to your customers’ understanding how to save, earn, borrow, invest, and protect their money. These results can translate into:
More discretionary income to spend on point-of-sale products
Higher credit scores
Lower delinquencies and deficiency balances
Overall customer retention
Providing your customers with financial literacy is the first step to providing them with great products and services that meet their needs. This will ensure their trust and confidence in you and the products you offer, so they may remain loyal for years to come.