Americansí Lack of Financial Literacy Is an Opportunity for Credit Unions

  • Share:
marketing

CUTrendScan

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. The Member Service Experience
  2. Become a Tax Resource for Members
  3. Should You Still Be Concerned about ADA Website Compliance?
  4. What Is a DDoS Attack and Why Should Credit Unions Be Concerned?
  5. Anticipating Change with a Succession Plan
  6. Don't Get Snagged on ADA Compliance Requirements
  7. The Performance Management Conundrum: Structure vs. Creativity
  8. Experience Company Growth and Discovery with Employee-Driven Communication
  9. The Planning Process - Improved
  10. Building a Website with the User in Mind
  11. Content Marketing: Well Worth the Effort
  12. Your Social Media Accounts Deserve Quality Content
  13. Are You Ready to Adopt a Continuous Performance Management System?
  14. What Credit Unions Should Do with Ambiguous ADA Standards
  15. Continuous Performance Management is Disrupting HR
  16. The Website Audit Your Credit Union Needs
  17. 5 Things Credit Unions Can Learn from Cyber Attacks
  18. Optimizing Websites for Voice: What You Need to Know
  19. The Importance of Creating Quality Content
  20. 3 Succession Plans Your Credit Union Needs
  21. 7 Tax Changes Your Members Need to Know About
  22. Whatís Hot in Performance Management Technology
  23. Americansí Lack of Financial Literacy Is an Opportunity for Credit Unions
  24. Are You Properly Rewarding Your CEO?
  25. Why HR Should Take Advantage of Employee Self Service
  26. Credit Unions Could Replace Predatory Lenders
  27. The Quest for a One-Stop Shop Financial App
  28. Is Your Executive Compensation Still Appealing?
  29. 3 Website Design Trends for 2019
  30. Consumer Appetites in Mobile Innovation
  31. 3 Ways Credit Unions Can Prepare for a Cyber Extortion
  32. Build Up Membership Through Supportive Savings Programs
  33. Consumer Attitudes Toward Digital Advertising
  34. The Credit Union Advantage for the Digital Customer
  35. Wanted: Apps for Clarification and Simplification
  36. People Analytics: Bringing HR and Data Together
  37. Popular DDoS Mitigation Methods in 2019
  38. Volunteer and Young Board Members Need Development
  39. Prioritizing the Credit Union Employee Experience
  40. The Win-Win Results of Prize-Linked Savings for Credit Unions and Members
  41. 3 Key Factors for Creating Good Content
  42. 4 Steps to Increased Social Media ROI
  43. Shifts and Trends to Know About in E-Learning
  44. What the C-Suite Wants out of Social Media
  45. Credit Union Compensation: Philosophy or Strategy?
  46. Is Your CMS the Right Fit?
  47. How Useful Are Member Personas for Credit Union Marketing Teams?
  48. Selling Payments and Wealth Management Services
  49. A Simple Way to Unify Your Marketing Efforts
  50. How Credit Unions Can Formalize the Branding Process
  51. Keeping Up with Digital Lending Convenience
  52. Making Sure You Have the Right Leaders in the Right Seats
  53. Learning Management Systems: What Credit Unions Should Consider
  54. How Credit Unions Can Embrace Storytelling in Marketing
  55. How to Identify What You Want in an ESS
  56. Empowering Employees and HR with the Latest Technology
  57. Credit Unions Can Complete with Shadow Banks
  58. The Dream Team for Successful Online Customer Interactions
  59. How to Generate Content with Fewer Resources
  60. 2 Big FinTech Goals for Credit Unions
  61. Are You Missing Out on the Power of Video?
  62. Are Your Landing Pages up to Snuff?
  63. Do You Know Why Payday Loans Are Used so Much?
  64. If Your Site Isn't Mobile Optimized, You're Losing Out
  65. Protect Your Credit Union with a Website Accessibility Response Plan
  66. 6 Factors for Choosing the Right ESS System
  67. What Borrowers Wished Credit Unions Knew
  68. Caution: Customers Don't Always Ask for What They Want
  69. 5 Guideposts to Measure Your Brand Promise Against
  70. 3 Factors Impacting Credit Union Compensation Plans
  71. Don't Underestimate the Power of Financial Education
  72. Leveraging Social Media for Member Engagement
  73. Underestimate the Onboarding Process at Your Peril
  74. Finding the Best Platform for HR Technology
  75. The Role of HR and Hiring Managers in the Candidate Experience
  76. 3 Brand Promises Credit Unions Can Learn From
  77. Why You Should Invest in an Applicant Tracking System
  78. Don't Undervalue Your Brand Promise
  79. Content, Tools, and Channels to Capture Consumer Attention
  80. The Best Compliance Training with New Topics You Will Need
  81. Just How Distracted Are Consumers?
  82. Preparing a Transparency Communication Plan
  83. Preparing for Compensation Transparency

Related Trends

  1. Consumer Attitudes Toward Digital Advertising
  2. Content, Tools, and Channels to Capture Consumer Attention
  3. Just How Distracted Are Consumers?
  4. 3 Key Factors for Creating Good Content
  5. The Member Service Experience
  6. Selling Payments and Wealth Management Services
  7. Become a Tax Resource for Members
  8. Americansí Lack of Financial Literacy Is an Opportunity for Credit Unions
  9. Build Up Membership Through Supportive Savings Programs
  10. 7 Tax Changes Your Members Need to Know About
  11. The Importance of Creating Quality Content
  12. The Win-Win Results of Prize-Linked Savings for Credit Unions and Members
  13. Content Marketing: Well Worth the Effort
  14. Your Social Media Accounts Deserve Quality Content
  15. How Credit Unions Can Embrace Storytelling in Marketing
  16. How Credit Unions Can Formalize the Branding Process
  17. 4 Steps to Increased Social Media ROI
  18. What the C-Suite Wants out of Social Media
  19. Leveraging Social Media for Member Engagement
  20. Are Your Landing Pages up to Snuff?
  21. Don't Underestimate the Power of Financial Education
  22. If Your Site Isn't Mobile Optimized, You're Losing Out
  23. 3 Brand Promises Credit Unions Can Learn From
  24. How to Generate Content with Fewer Resources
  25. 5 Guideposts to Measure Your Brand Promise Against
  26. How Useful Are Member Personas for Credit Union Marketing Teams?
  27. A Simple Way to Unify Your Marketing Efforts
  28. Are You Missing Out on the Power of Video?
  29. The Dream Team for Successful Online Customer Interactions
  30. Don't Undervalue Your Brand Promise

Industry insights
to your inbox!

Subscribe