Whether or not you and your customers are ready, the largely debated unemployment compensation provided by the CARES Act expires on July 31. People may be anxious, unsure of their options, or don’t know who to turn to for help. They might not even know the funds are ending. With nearly one-third (30%) of people saying they use their stimulus checks to pay bills to keep a roof over their head, it’s time for banks to drive economic empowerment through financial literacy.
Here are three ways to communicate with customers, and potential customers, by increasing financial literacy education, driving awareness, and providing digital access.
Start building financial literacy among your customers through accessible education. Financial literacy is arguably one of the most important skill sets to have. However, Americans demonstrate relatively low levels of financial literacy and have difficulty applying financial decision-making skills to real-life situations. A study conducted by FINRA, showed that 66% of individuals in the U.S. are unable to answer more than three of the five questions covering aspects of economics and finance encountered in everyday life. The questions include the effects of compound interest, inflation, principles relating to risk and diversification, the relationship between bond prices and interest rates, and the impact that a shorter term can have on total interest payments over the life of a mortgage.
There’s an opportunity for banks to teach traditionally underbanked customers how to build wealth and stability. A Federal Reserve report on Economic Well-Being of U.S. Households found that more than 10% of adults put off at least one credit application because they thought their application would be denied. By self-selecting to not apply for credit, an individual can lose out on financial opportunities that require a high credit score and credit history. This can have far-reaching impacts on entrepreneurship, home mortgages, car purchases, and educational opportunities.
Banks like Chime, Citizens Bank, and First Republic Bank have already taken action in developing financial education programs. First Republic Bank believes in starting financial literacy early and has programs to help elementary students learn through a portal. This is meant to educate them early on key financial concepts so they can make better decisions later on.
MyTrailhead for customers can be a great place to build your financial literacy program. Unlike a learning management system, myTrailhead is a learning experience platform that's designed around the needs of the learner. Banks can onboard and educate customers through gamified learning with points, badges, and ranks. The content can be customized to the unique needs of the audience while being accessible from any device. For example, financial institutions might develop a specific module for those affected by the expiration of the CARES Act stimulus checks and address how they can financially manage moving forward.
Financial literacy programs delivered through experience learning platforms will help develop an audience to, hopefully, become brand advocates. While these brand advocates might not be in a position for a mortgage or investment account yet, they are learning the necessary skills to build financial wealth for today and for the future.
It’s important to communicate with customers who are experiencing financial hardship. You can provide guidance on how your financial institutions can be partners who can advise them on their current and future finances, and help them plan for growth.
Ally Bank is an example of how a bank can leverage marketing to drive awareness to customers. Using social channels like Instagram and Facebook they have paired influencers with engaging content to communicate financial wellness strategies during difficult times. Customers of Ally can learn more by going to their Ally community about coronavirus (COVID-19
To build awareness during times of volatility, it’s essential to proactively communicate with messages tailored to customers' unique situations and preferences.
Focus on your customer segments by using customer behavior and preferences data to gain insights, so you can develop relevant messaging to that audience. With a solution such as Audience Studio, you can assign an identity to that audience to continue to educate them at a later date with timely communications about market changes and how they are impacted.
Once you have the data to develop basic identity profiles, you can communicate using messaging channels, putting the individual on a journey during which you’ll deliver relevant educational and supportive information.
To build trust with these customers lead with a specific call to action such as “learn more” where they are directed to learn about options that can empower them to financial wellness.
Now they know you exist, what's next? When someone is ready to raise their digital hand they'll want to have access to information anywhere and anytime. Financial institutions have to be thoughtful around how they educate and how potential customers will get access to the information they need.
Traditionally, banks would provide in-person seminars on topics such as first-time home buying or might require you to visit a branch for financial planning and credit card applications. Now, customers expect everything to be available virtually which has only intensified with the pandemic and economic recession.
Banks should consider creating an omni-channel experience for customers to create stronger relationships with their audience across points of contact. For example, Sherry Graziano, Truist senior vice president head of mortgage omni experience mentioned in a recent webinar that omni-channel experience has been the absolute best way to connect with their borrowers. When they think about mortgage relief in particular, 22% of their clients are engaging with them overnight, not during normal business hours.
A mobile app or a portal are branded channels for your audience to access the information from anywhere. This is particularly important for customers highly impacted by the pandemic. They might be unemployed or if they are working, they are focused on their job and trying to remain gainfully employed. They also might be dealing with other circumstances, like homeschooling children.
The ability to research relevant frequently asked questions (FAQs) with a knowledge base and get quick answers from a chatbot allows for self service and convenience. It also reduces the call volume, so agents can focus on complex needs.
If you have profile data, you can tailor the digital experience to what is important to your audience. Solutions like Financial Services Cloud provides a foundation to build household information needed by banks to assess opportunities for customers. Financial Services Cloud includes context such as Life Events, Financial Accounts, Cases, or Actionable Relationship Centers so financial institutions can support customer relationships and hierarchies. If a customer has a life event that indicates they were recently furloughed, you can tailor notifications in the portal or app, providing information on available financial relief options.
By providing access to the appropriate information, you can enable employees to have empathic conversations with those in need.
We know the future is uncertain that’s why it’s time to help your customers by supporting financial literacy, driving awareness, and providing access to banking services. Grow your audience and become the bridge to economic recovery for your community. Learn more about how to alleviate financial stress for families and businesses by watching our webinar.
Become the bank your customers trust.