New data on financial literacy and how banks and credit unions can leverage their leadership to support consumer financial health
The financial impact of the pandemic over the last two years has been felt across the economy, but probably nowhere more acutely than at the family kitchen table. In fact, the Center on Budget and Policy Priorities finds the “COVID-19 pandemic and resulting economic fallout caused significant hardship” for families in their household finances, especially in the areas of employment, housing and food. While fiscal adversity over the past two years “would have been far worse without extraordinary steps” taken by government entities from the federal down to the local level, family finances are still tenuous today.
As a result, legislators, educators and financial services leaders of all stripes are stepping up in new and novel ways. “There’s been an extra push to get personal finance education into high schools across the country this year,” according to CNBC reporting. Last year saw 25 states “introduce legislation to add personal finance education to their high school curriculum.” Seven states already provide what Next Gen Personal Finance calls the “gold standard” in personal finance education: a standalone half-semester course for high schoolers. So far, it’s bearing fruit, with lower average credit card debt in states with financial literacy programs.
But there is still a long way to go. New polling data shows the deep toll of a lack of literacy in finances has on the whole economy, costing Americans $352 billion in 2021 alone. On the individual level, that translates into $1,389.06 average estimated money lost due to lack of personal finance knowledge. While it’s true that more than half of Americans give themselves a grade of A or B in their own personal financial literacy, a stunning three-quarters say they could still benefit from “advice and answers from a money expert” according to the National Financial Educators Council. Who better than banks to provide that expertise?
Always the locus of financial leadership in their communities, banks and credit unions have provided a host of options to foster financial literacy and expand consultation. However, it’s clear there’s room to go even further. Now, J.D. Power – the standard-bearer of customer satisfaction – is giving FIs even more motivation and support through their new certification program. Bob Neuhaus, executive managing director of banking, says, “Financial institutions that proactively recognize the growing importance of financial health are well-positioned for differentiation and to ultimately improve their customers’ lives.”
For the latest data, news and trends in financial services, like financial literacy programs and customer consultatory services, stay tuned to Believe in Banking. For insights on best practices in banking and meeting consumers at the point of need, contact Adrenaline’s banking and credit union experts at firstname.lastname@example.org.