Why Banks Need To Support Financial Education
As America struggles to emerge from the most difficult financial crisis of our lifetimes, and the financial services industry struggles to repair serious reputational damage and regain consumer trust, the National Foundation for Credit Counseling (NFCC) and its members are uniquely positioned to work with financial services institutions to deliver and direct financial education programs to help the millions of Americans who are vulnerable in the wake of the financial crisis.
The NFCC’s 2012 Consumer Financial Literacy Research Survey conducted by Harris Interactive revealed that:
- Nearly half of all Americans today grade themselves C, D, or F in their knowledge of personal finance;
- 56% admit they do not have a budget;
- 39% do not have any non-retirement savings;
- Most adults have neither reviewed their credit score (55%) nor their credit report (62%).
This year’s survey unveiled some disturbing trends, showing that a significant number of Americans are saving less, spending more, and carry credit card debt over from month-to-month, suggesting that the painful financial lessons of the past are quickly being forgotten. The survey results show that the need for an increase in financial education is not only clear, but urgent.
Partnering with the NFCC provides financial services companies with an opportunity to work with a trusted, independent third party. The NFCC has a six decades-long history of working with millions of American consumers. With 90 member agencies, 750 offices, and 2,300 professionally certified counselors and educators in all 50 states and Puerto Rico, we are the largest and longest-standing nonprofit financial counseling and education network in the country.
Today more than ever, the NFCC vision to create a national culture for financial responsibility clearly aligns with national interests. NFCC members provide counseling and education programs that are tailored to the local needs of their communities. These programs reach underserved and at-risk consumers and targeted market segments, for example members of the military, seniors, students and women.
There are many benefits to collaborating with a nationally-recognized, community-based nonprofit organization like the NFCC, including:
- An opportunity to build a more positive brand image as a good corporate citizen and rebuild customer loyalty;
- Gaining access to an extensive network of financial practitioners and stakeholders;
- Creating a greater sense of integrity and dependability;
- Receiving more favorable media coverage;
- Gaining access to innovative ideas and consumer tools;
- Expanding market share for products or brands by enhancing their social value; and
- Meeting important Community Reinvestment Act (CRA) requirements.
One of the most critical challenges for the banking industry is to re-engage and communicate not only with the media, but with the wider public, to re-ignite a dialogue with the American consumer. Financial institutions have been intensely focused on adapting and responding to the recent changes in the financial world, such as the new regulatory requirements, and have primarily been engaged with the regulators and policymakers at the expense of focusing on their retail customers, business partners, and the “real” economy more widely. It is time for financial institutions to re-assert the critical roles they play in the economy, demonstrate they are making fundamental changes and take a more public stand on social and consumer-driven issues.
Banking is an essential part of modern society so financial institutions should not feel defensive about it. Recent surveys show that consumers have lost appreciation for the social benefits that the banking industry brings, such as jobs, community projects, and the generation of tax revenues. Investing in the financial stability of consumers will help your organization demonstrate a genuine desire to engage in the long-term recovery and well-being of American consumers. Financial institutions need to emphasize how their products and services can really help families with their daily life, and how they can help them be successful. Nonprofit partners provide financial and educational services, and are value-added, independent professionals who can partner with you to service your customer base.
Let’s be part of the solution together.