Americans' Lack of Financial Literacy Is an Opportunity for Credit Unions

  • Share:
marketing

Americans' Lack of Financial Literacy Is an Opportunity for Credit Unions

Modern marketing is all about catering to demanding, informed consumers. Perhaps surprisingly, marketing to informed consumers can sometimes be easier than marketing to uninformed consumers — after all, they’ve already done some research, perhaps scoped out some competing brands, and for financial institutions in particular, many consumers already have experience with at least one bank or credit union. However, how do financial institutions market themselves to people who aren’t informed? Banks and credit unions rely on a steady stream of financially literate consumers, the same people who deposit their paychecks into a checking account at regular intervals and take out loans to finance a home, auto purchase or new business venture.

But how do these same institutions reach consumers who lack basic financial knowledge? Those who have poor saving habits and are unfamiliar with banking as an institution? Many banks and credit unions are now realizing that this problem is actually an opportunity in hiding, and financial education is the key to proving value and building loyalty with a significant number of consumers. Not only are financial education programs trending among the c-suite in the industry, but at least one recent survey found that consumers seek out advice specifically from their financial institutions.

Let’s break down the financial situation of many Americans and how this is an opportunity for credit unions.

The average American adult has a poor grasp of financial literacy

It’s been widely reported that the average American adult does not have a good grasp of basic financial literacy. According to the 2015 National Capability Study by the FINRA Foundation, a survey of over 27,000 American adults found that two-thirds were unable to pass a basic financial literacy test.

The FINRA study asked participants simple questions related to personal finance, such as the basics of inflation, compound interest and home mortgage term rates. Of the participants, 63 percent received a failing score on the test. The 2015 study also revealed that 50 percent of respondents have no rainy day fund or emergency savings, 58 percent did not compare credit cards before choosing one and 26 percent have engaged in non-bank borrowing within the past five years.

More recent studies have surfaced, including one from the research firm Raddon, that found the majority of respondents are fairly confident about their own financial literacy but fail to answer basic financial questions correctly. In a 2018 survey of over 2,000 US adults over the age of 18, more than half (55 percent) rated their personal financial knowledge at an “A” (18 percent) or “B” (37 percent) grade. Only a mere 5 percent of respondents believed they had a failing grade of “F.” Survey participants were directed to take a quick test of their financial literacy, and results show that more than half of the respondents ended up receiving a failing “F” score, and only 6 percent scored a grade of 90 percent or higher.

These results highlight how financial education content, events and materials are an important opportunity for credit unions of all sizes to meet current and prospective members where they are and walk with them through the journey of improved financial wellness. Not only will this make lifelong loyal members, but it will also have a positive impact in your community. It’s a win-win scenario credit unions shouldn’t shy away from.

  • Share:


« Return to "Trends"
TrendScan logo
<< Back to Articles

Latest Trends

  1. Identifying Marijuana-Related Businesses
  2. Cut Through the Noise and Deliver Value Members Want
  3. Opportunities and Risks of Banking for Marijuana-Related Businesses
  4. 3 Key Factors for Creating Good Content
  5. A Content Management System Will Make Your Life Easier
  6. Preparing a Transparency Communication Plan
  7. You Know You Need an LMS — Now What?
  8. Why You Need ERM in Your Strategic Planning
  9. Enterprise Risk Management — Where to Start
  10. The Quickest Way to Understand Enterprise Risk Management (ERM)
  11. Just How Distracted Are Consumers?
  12. Omnichannel Delivery: Banking Based On Members
  13. Credit Unions Could Replace Predatory Lenders
  14. Are You Properly Rewarding Your CEO?
  15. The Easiest Way to Deliver Content for Employee Development
  16. Is Your Credit Union Supported by the Four Pillars of Digital Banking?
  17. Bankers associations’ opposition to mergers does a disservice to member banks and to consumers
  18. Three ways to up your social media game
  19. Credit Unions Have an Opportunity to Help Their Members Through Tax Season
  20. Keep content relevant, short, iterative and engaging
  21. What Borrowers Wished Credit Unions Knew
  22. The Quickest Way to Find the Right (and Safest) CMS
  23. The Process of Crafting a Relatable, Moving Brand Story
  24. Americans Trust Their Financial Institutions for Tax Advice
  25. Consumer Attitudes Toward Digital Advertising
  26. Predict the Future of Mortgage Lending with Analytics
  27. Three Ways to Enhance Compensation Strategy for an Age-diverse Workforce
  28. Achieving the Golden “Narrative Transport” in Brand Storytelling
  29. Are You Ready to Adopt a Continuous Performance Management System?
  30. Remaining a Player in the New Home-Buying Experience
  31. The Quest for a One-Stop Shop Financial App
  32. Identify how chatbots will help you
  33. Leverage the Resources of Trusted Experts for Tax Season 2019
  34. The Secret to Future-Proofing Your Organization
  35. What Is a DDoS Attack and Why Should Credit Unions Be Concerned?
  36. You Might Already Have the Solution to Your Current Talent Competency Gap
  37. Conversational Commerce and the Rise of the Chatbot
  38. Do you need a new compensation strategy for multigenerational staff?
  39. Preparing for Compensation Transparency
  40. 2 Big FinTech Goals for Credit Unions
  41. 5 Things Credit Unions Can Learn from Cyber Attacks
  42. How Useful Are Member Personas for Credit Union Marketing Teams?
  43. Learning Management Systems: What Credit Unions Should Consider
  44. Become a Tax Resource for Members
  45. 6 Factors for Choosing the Right ESS System
  46. Experience Company Growth and Discovery with Employee-Driven Communication
  47. What's Hot in Performance Management Technology
  48. Common Mistakes in Compliance
  49. Popular DDoS Mitigation Methods in 2019
  50. Should You Still Be Concerned about ADA Website Compliance?
  51. Do You Know Why Payday Loans Are Used so Much?
  52. The Best Compliance Training with New Topics You Will Need
  53. Prepare for integration
  54. Volunteer and Young Board Members Need Development
  55. What others are doing
  56. Credit Union Compensation: Philosophy or Strategy?
  57. Americans' Lack of Financial Literacy Is an Opportunity for Credit Unions
  58. The Member Service Experience
  59. The Planning Process - Improved
  60. The Role of HR and Hiring Managers in the Candidate Experience
  61. Why HR Should Take Advantage of Employee Self Service
  62. Don't Get Snagged on ADA Compliance Requirements
  63. 3 Succession Plans Your Credit Union Needs
  64. Building a Website with the User in Mind
  65. Continuous Performance Management is Disrupting HR
  66. 7 Tax Changes Your Members Need to Know About
  67. Content Marketing: Well Worth the Effort
  68. 3 Ways Credit Unions Can Prepare for a Cyber Extortion
  69. Empowering Employees and HR with the Latest Technology
  70. People Analytics: Bringing HR and Data Together
  71. The Win-Win Results of Prize-Linked Savings for Credit Unions and Members
  72. Your Social Media Accounts Deserve Quality Content
  73. Anticipating Change with a Succession Plan
  74. Consumer Appetites in Mobile Innovation
  75. The Performance Management Conundrum: Structure vs. Creativity
  76. The Website Audit Your Credit Union Needs
  77. Shifts and Trends to Know About in E-Learning
  78. Are You Missing Out on the Power of Video?
  79. Prioritizing the Credit Union Employee Experience
  80. 3 Website Design Trends for 2019
  81. 5 Guideposts to Measure Your Brand Promise Against
  82. Optimizing Websites for Voice: What You Need to Know
  83. Content, Tools, and Channels to Capture Consumer Attention
  84. How to Identify What You Want in an ESS
  85. The Importance of Creating Quality Content
  86. Why You Should Invest in an Applicant Tracking System
  87. Serving the Underbanked and Millennials
  88. What Credit Unions Should Do with Ambiguous ADA Standards
  89. Is Your Executive Compensation Still Appealing?
  90. Making Sure You Have the Right Leaders in the Right Seats
  91. 4 Steps to Increased Social Media ROI
  92. Build Up Membership Through Supportive Savings Programs
  93. Selling Payments and Wealth Management Services
  94. A Simple Way to Unify Your Marketing Efforts
  95. The Credit Union Advantage for the Digital Customer
  96. Protect Your Credit Union with a Website Accessibility Response Plan
  97. Wanted: Apps for Clarification and Simplification
  98. The Dream Team for Successful Online Customer Interactions
  99. Are Your Landing Pages up to Snuff?
  100. Don't Undervalue Your Brand Promise
  101. Is Your CMS the Right Fit?
  102. Credit Unions Can Compete with Shadow Banks
  103. Caution: Customers Don't Always Ask for What They Want
  104. Don't Underestimate the Power of Financial Education
  105. What the C-Suite Wants out of Social Media
  106. 3 Brand Promises Credit Unions Can Learn From
  107. How Credit Unions Can Embrace Storytelling in Marketing
  108. Keeping Up with Digital Lending Convenience
  109. How Credit Unions Can Formalize the Branding Process
  110. How to Generate Content with Fewer Resources
  111. Underestimate the Onboarding Process at Your Peril
  112. Leveraging Social Media for Member Engagement
  113. Finding the Best Platform for HR Technology
  114. 3 Factors Impacting Credit Union Compensation Plans
  115. If Your Site Isn't Mobile Optimized, You're Losing Out

Related Trends

  1. Keep content relevant, short, iterative and engaging
  2. Three ways to up your social media game
  3. What others are doing
  4. Credit Unions Have an Opportunity to Help Their Members Through Tax Season
  5. Leverage the Resources of Trusted Experts for Tax Season 2019
  6. Americans Trust Their Financial Institutions for Tax Advice
  7. Achieving the Golden “Narrative Transport” in Brand Storytelling
  8. The Process of Crafting a Relatable, Moving Brand Story
  9. Cut Through the Noise and Deliver Value Members Want
  10. Consumer Attitudes Toward Digital Advertising
  11. Content, Tools, and Channels to Capture Consumer Attention
  12. Just How Distracted Are Consumers?
  13. 3 Key Factors for Creating Good Content
  14. Become a Tax Resource for Members
  15. Americans' Lack of Financial Literacy Is an Opportunity for Credit Unions
  16. Build Up Membership Through Supportive Savings Programs
  17. 7 Tax Changes Your Members Need to Know About
  18. The Importance of Creating Quality Content
  19. The Win-Win Results of Prize-Linked Savings for Credit Unions and Members
  20. Content Marketing: Well Worth the Effort
  21. Your Social Media Accounts Deserve Quality Content
  22. How Credit Unions Can Formalize the Branding Process
  23. How Credit Unions Can Embrace Storytelling in Marketing
  24. 4 Steps to Increased Social Media ROI
  25. What the C-Suite Wants out of Social Media
  26. Leveraging Social Media for Member Engagement
  27. Are Your Landing Pages up to Snuff?
  28. Don't Underestimate the Power of Financial Education
  29. If Your Site Isn't Mobile Optimized, You're Losing Out
  30. 3 Brand Promises Credit Unions Can Learn From
  31. How to Generate Content with Fewer Resources
  32. 5 Guideposts to Measure Your Brand Promise Against
  33. How Useful Are Member Personas for Credit Union Marketing Teams?
  34. A Simple Way to Unify Your Marketing Efforts
  35. Are You Missing Out on the Power of Video?
  36. The Member Service Experience
  37. The Dream Team for Successful Online Customer Interactions
  38. Don't Undervalue Your Brand Promise
  39. Selling Payments and Wealth Management Services

Industry insights
to your inbox!

Subscribe