February 15, 2020
What Are You Doing to Promote Financial Literacy?
Following the 2008 recession and its long-lasting impact on communities and individuals, organizations across the public and private sector have recommitted to financial literacy as a primary directive for the economic health of the country and its people. The term financial literacy describes having the knowledge and skills necessary to make healthy financial decisions towards attaining the needs and goals of an individual or community.
So why should financial institutions contribute to this national agenda to create a more financially informed and knowledgeable society? Why not just leave it to education institutions and community organizations? Is it about feel good deeds and getting a thumbs up for CRA credit, or is it about developing a loyal client base and your ROI? Do community investment and business growth need to be mutually exclusive?
Current thinking on successful financial literacy strategies suggests a perhaps obvious point — basic financial capability requires access to both financial education and the necessary tools, products and services to act on that knowledge. Banks and Credit Unions are in a unique position to provide for all of these needs. There is no 'one size fits all' approach here. Following a 'life stage' model — understanding a client's life stage and their attendant financial concerns — provides the basis for better financial education and consulting. Bridging the theory of financial literacy efforts to the reality of specific life stage needs of clients just makes sense.
The key to growing and maintaining connected relationships is simple: Show that you care about your customers by providing them with the education they need to make informed decisions. They'll stick with you beyond fleeting transactions and view you as the trusted financial advisor they want and need.
What is your institution doing to promote financial literacy?
"The only irreplaceable capital an organization possesses is the knowledge and ability of its people. The productivity of that capital depends on how effectively people share their competence with those who can use it."
- Andrew Carnegie