Consumers are relying on you: How to support account holders through financial literacy
July 21, 2021 | Allied Solutions
125 million US adults live paycheck to paycheck, 33% of consumers have less than $1,000 saved up for an emergency and most Americans wouldn’t consider their financial status healthy. Combine those factors with the aftermath of a global pandemic and it’s apparent that it has never been more important to offer financial support to your account holders.
One ways financial institution can support account holders is to provide resources that enable better financial decisions. Each of your account holders have extremely individualized needs and situations, so providing an array of financial literacy resources and tools can foster long-lasting financial independence.
Encouraging financial independence can:
• Empower account holders with a sense of self-responsibility and achievement over their spending, saving, investing, and borrowing
• Enhance account holders’ knowledge of finances as well as aid in consumer experience
• Expand your brand’s credibility and reputation while offering an exclusive value add to account holders
So how can your brand and organization foster a sense of personal financial independence while still keeping other priorities like deposit growth, loan volume, and risk management top of mind? By offering resources and avenues for financial literacy financial institutions can uncover and gain more growth opportunities.
3 Ways to Inspire Financial Independence
Offer Financial Literacy Tools
Gamification is emerging as a financial literacy tool. The essence of financial literacy gamification is a way to simulate financial scenarios, allowing the user to make decisions and learn lessons through a virtual environment. Users can then make connections between the mock scenario and real life personal financial scenarios. Rather than presenting facts or a list of financial do’s and don’ts gamification teaches basic and in-depth financial education through real-life scenarios, without the real-life consequences.
Another financial literacy tool is a PFM, or Personal Finance Manager. A PFM can integrate with existing platforms and could include a calculator for savings, debt or retirement, credit or overdraft monitoring, or a budgeting tool. Offering a personal finance manager helps account holders gain a holistic view of their financial health and can help attract new deposits and loan opportunities.
Keep Leveraging Digital
Digital communication tools can fuel financial independence by connecting financial institutions to their account holders both inside and outside of the branch. Staying connected to accountholders through their channel of choice allows you to present them with information that aligns with your strategic goals. Offering financial education and reminders of how to leverage your products and services can take place through multiple channels including text, email, and video. Video, in particular, is here to stay and proving to be a powerful tool to verify information and communicate with account holders.
Deploy Artificial Intelligence
A recent TransUnion study highlights that 83% of borrowers are more likely to follow through with delinquency arrangements if they can conduct it via self-service and are provided with electronic payment processing tools. Artificial intelligence is fueling these types of interactions with account holders and is aiding in 24/7 customer support, enhanced marketing efforts, fraud monitoring, and better automation.
Self-service for insurance verification also leverages automation to manage risk and empowers borrowers to take steps to maintain a healthy financial status with their financial institution.
Overall, financially healthy accountholders are less risky, more likely to be retained, maintain higher deposits, and will choose your institution for future lending options. Empowering financially savvy decision making brings about financial independence, ultimately improving account holders' quality of life. Brand reputation and loyalty are deepened when account holders feel the impact that your brand has had on their lives. Leveraging financial literacy platforms, digital tools, and artificial intelligence can empower accountability and responsibility, enhance consumer experience, and expand consumer financial independence.
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About Allied Solutions
Allied Solutions, LLC is one of the largest providers of insurance, lending, and marketing products to financial institutions in the US. Allied Solutions uses technology-based products and services customized to meet the needs of over 4,000 banks and credit unions, along with a portfolio of innovative products and services from a wide variety of providers. Allied Solutions maintains over 10 regional offices and service centers around the country and is a subsidiary of Securian Financial Group, Inc.
Content in the blog posts are the opinion and views of the writer, and don't necessarily reflect the opinions or views of Allied Solutions.