Preventing Elder Financial Abuse: Financial Institutions can help

 

 

 

 

 

 

 

 

 

As the baby boomer population quickly becomes the largest senior demographic in American history, it is increasingly difficult for them to keep keeping their hard-earned investments safe. One study says that over $36 billion – with a “b” – is lost each year by preying on seniors.  And there are certainly plenty of scams out there targeting the elderly: roofing scams, Medicare scams, tech support scams, and scams for reverse mortgages. Shockingly, allegedly half of the financial abuse targeting the elderly comes from within a senior’s own family. This type of preying on the elderly is known as “elder financial abuse,” and financial institutions are on the front lines to help make a dent in this growing problem.

Certainly financial institutions already deal with this problem, especially within the branch.  Sometimes a bank or credit union teller needs to expand their role and act as a social worker, family counselor, and banker all in one.  But this is a lot to ask of a front-line teller.  Furthermore, the regulatory landscape in this space is changing, and as awareness of senior scams increases, so will regulatory pressure on financial institutions.

Employees of financial institutions need help.

Furthermore, boomers and their caregivers also need help.  There are literally call centers out there that systematically target seniors on the phone to scam them.  If one person does not fall for the scam, the call center just hangs up and calls the next victim.  It is disgusting, but unfortunately works. They prey on the uninformed. That’s why education and awareness about common scams, and how to handle them, can help shut these call centers down.

Family members of the elderly also need help. They need to know how to navigate very tricky questions about who manages parents’ finances over time.  They need to know what to watch out for. And again: since half of the abuse happens within the family, families need to know what to do in those extremely embarrassing and difficult situations where the problem is not an external scammer, but inside the family itself.

While not the only strategy to help combat elder financial abuse, education and awareness is a big part of the solution. And financial institutions – as a pillar of the local community they serve – can be a trusted source of this education.  FIs need help in order to help.

As the baby boomers age, the problem of financial elder abuse is not going to go away. For banks and credit unions that want to protect their customers, the time to take active steps is now. For more information on how to create a program to prevent financial elder abuse, please request a demo.

Financial Elder Abuse

Keeping Baby Boomers Financially Secure

How and why financial institutions can help

As the baby boomer population quickly becomes the largest senior demographic in American history, there is a growing concern about keeping their hard-earned investments safe. According to a recent report, the U.S. senior community loses an astonishing $53 billion annually to both fraudulent and deceptive practices.[1] This type of preying on the elderly is known as “elder financial abuse,” and financial institutions are in the perfect position to help. First, let’s look at the three types of financial elder abuse:

  • Financial Exploitation
    This type of exploitation is legal but highly unethical, and consists of deceiving or convincing seniors to make poor financial decisions or give their money away.
  • Criminal Fraud
    This type of activity is clearly illegal, and includes identity theft and mail fraud.
  • Caregiver Abuse
    This refers to financial theft or deception by someone trusted—whether it be a family member, healthcare worker, or even a financial manager.

How banks and credit unions can help

As institutions that have built long-term relationships with seniors and their children, banks and credit unions are perfectly positioned to help stem the tide of financial elder abuse. But how to do so? Financial education is a big part of the solution. Both elders and their caregivers feel confident that the information they receive from their bank or credit union is both honest and understandable—but getting the information to them can be a challenge.

In the digital age, where some seniors may be housebound but accustomed to surfing the Web, while others might feel more comfortable visiting their local branch, financial education must be a two-pronged approach. The first prong includes providing digital programming that can be accessed by boomers and their children—anywhere, anytime. The second prong focuses on the branch level, and includes training employees and providing relevant print materials. As the baby boomers age, the problem of financial elder abuse is not going to go away.

[1] Study: The True Link Report on Elder Financial Abuse 2015 Executive Summary. (January, 2015). Retrieved January 20, 2017, from https://www.truelinkfinancial.com/news/true-link-releases-latest-elder-financial-abuse-findings-losses-discovered-to-be-much-worse-than-originally-thought

Financial Education Program Online

4 Elements of an Effective Financial Education Program

Young Adult at Computer

Recent studies have shown that young people are growing up without adequate financial education, and banks, credit unions, and employers have been stepping in to fill this gap. But as a corporation or financial institution, how can you be sure that the financial education program you choose is an effective one? Fortunately, the Consumer Financial Protection Bureau (CFPB) has laid out guidelines for what makes an effective financial education program.[1] Here’s what to look for:

  1. Content
    How strong is the content of the program, and what topics does the program cover? Ideally, a financial education program should cover a wide range of topics, including spending, saving, investing, credit, and money management. Also look for programs that speak to different life stages and employ age-appropriate methods and technologies.
  2. Utility
    Is the program easy to use—for both students and administrators? Is it available in other languages? Look for programs that can be accessed by multiple demographics and age groups, and on a range of devices, including computers, phones, and tablets.
  3. Quality
    Explore the quality of the program. How deep is the subject matter? Where are the facts coming from? And is it based on the most recent research in the field?
  4. Efficacy
    Perhaps most importantly, how do you know that the program is effective? A reputable financial education program should be able to demonstrate that students’ knowledge increases after taking the course. Look for programs that not only measure and document student progress, but also can show success after doing so in the past.

There are many financial education programs available in the marketplace, but not all of them are created equal. When you’re evaluating a new program, these four critical elements will ensure that you’re getting your money’s worth.

[1] Report from the Consumer Financial Protection Bureau: Youth Financial Education Curriculum Review. (October 2015). Retrieved January 27, 2017, from http://files.consumerfinance.gov/f/201509_cfpb_youth-financialeducation-curriculum-review.pdf

Financial Education in Elementary School

Financial Education for Younger Kids

As financial institutions and employers watch the twenty-something generation struggle with money matters, there has been much talk about the importance of financial education for young people. But how young should you start?

A recent report by the Consumer Financial Protection Bureau (CFPB) offers compelling reasons for starting financial literacy education for children as early as elementary school.[1] According to the report, childhood financial attitudes, habits, and norms begin to develop between ages 6-12. Teaching children heathy money habits at this age can have lasting effects, setting them up for a lifetime of financial success. In specific, CFPB recommends focusing on two primary areas in elementary school:

  1. Financial Habits and Norms
    We already know that children learn social and cultural behaviors at a young age, by observing the behaviors and attitudes of the people around them. According to the CFPB, financial behavior is no different. The report argues that “the values, standards, routine practices, and rules of thumb used to routinely navigate our day-to-day financial lives” can—and should—also be taught to young children. In practical terms, this means that children who are exposed to healthy financial habits at a young age tend to grow up to be adults who also have healthy financial habits.
  2. Financial Knowledge and Decision-Making Skills
    Beyond socialization, kids also have the ability to start learning concrete financial skills at a young age. The CFPB notes that “skillful money management, financial planning, goal setting, and financial research” are among the hands-on skills that must be taught in order for children to have a healthy financial foundation. For example, teaching elementary-aged kids about saving money, managing a basic budget, comparison shopping, and setting money goals are skills that will last a lifetime, and will give them the financial confidence and knowledge needed to grasp more complex financial topics at a later age.

The financial world that our children will inherit is an increasingly complex one. In an age of online shopping, digital payments, global trading, and sometimes deceptive lending, we need to set up our children for success—and this means teaching them solid financial habits and skills at a young age. To learn more about family financial capability and examine how it can help inform your consumer financial education solutions download our guide.

 

[1]Study from the Consumer Financial Protection Bureau: Building blocks to help youth achieve financial capability. (September 2016). Retrieved January 27, 2017, from https://s3.amazonaws.com/files.consumerfinance.gov/f/documents/092016_cfpb_BuildingBlocksReport_ModelAndRecommendations_web.pdf

Join our webinar June 7th 1PM

Financial Education as a Digital Marketing Tool

Join our webinar June 7th 1PM

Join our webinar on June 7th 1PM EST to learn about how you can leverage financial education.

Four Reasons Why Financial Institutions Should be Paying Attention to Financial Education

Increasingly, financial institutions are leveraging digital financial education to market products and services to a highly targeted and responsive audience. In fact, a recent EverFi survey found that 89 percent of banks and credit unions are already using financial education as a part of their digital marketing strategy, while 45 percent are planning to increase their budget in this area. If you’re not investing in financial education as a digital marketing tool, here are four reasons why you should be:

  1. Consumers interested in financial education are hot leads
    Consumers who are seeking out financial education are already expressing interest in financial services—meaning they have “self-selected” as hot leads. By offering valuable, reliable information, banks and credit unions are positioning themselves as trusted sources of information, and are perfectly positioned to (very selectively) pitch relevant products and services.
  2. Financial education offers highly segmented audiences
    Offering digital financial education programs tailored to different topics and life stages allows banks and credit unions to segment this audience even further. For instance, a young Millennial learning about student loans might also be interested in an auto loan for their first car, while a mid-career earner researching retirement plans might be interested in learning about other investments.
  3. Going digital means accessing your audience anywhere, anytime
    Providing online financial education programming allows your institution an unprecedented reach—banks and credit unions can access their audience anywhere, anytime—via mobile phones, laptops, tablets, and other devices.
  4. Everyone else is doing it
    We’ve already learned that 89 percent of all financial institutions already provide online financial education. With that in mind, the most compelling argument for investing in this marketing tool might be that if you aren’t offering it, your customers will quickly find someone else who is.

Bottom line? In today’s on-demand digital world, if your marketing plan does not include digital financial education, you’re missing out on the chance to both attract and retain customers. For more information on how to leverage financial education for marketing, join our webinar June 7th at 1PM EST.

Financial Capability

The Evolution of Financial Literacy into Financial Capability

With Financial Literacy Month coming to a close, it’s time to ask an important question: should our industry be striving for more than just “literacy?”

In today’s world, we carry around a wealth of financial knowledge in our pockets. Our smartphones ensure that we’re never more than a few screen taps away from the answers to all of our questions. If you think about, carrying a smartphone is like having a bank or credit union branch in your pocket. Yet we’re still celebrating Financial Literacy Month like nothing has changed—when, in reality, a lot has changed.

Taken at its most basic definition, literacy is the ability to read and write. And while an understanding of financial products and terminology may have been a worthy goal for bank and credit union customers in the past, the bar needs to be raised for a world of technology and complex financial decision-making.

Tune in to our webinar on April 25th, 1-2pm ET to hear more on why your bank or credit union should focus on financial capability this Fin Lit Month.

Tune in to our webinar on April 25th, 1-2pm ET to hear more on why your financial institution should focus on financial capability this Fin Lit Month.

A Brief History of Financial Literacy

The first acknowledgement of a need for financial literacy might be this letter from John Adams to Thomas Jefferson in 1787 (since we at EverFi are in Washington DC, we love this kind of historical reference). However, the term itself wouldn’t start to gain popularity until after the 1914 passage of the Smith-Lever Act, which focused on providing citizens with necessary learning experiences, including financial education.

For the majority of the 20th century, financial literacy continued to be a relevant term. But most financial educational tools were text-based, so absorbing this knowledge involved a lot of reading and writing. As it did for many industries, technology soon changed everything.

Smartphones Change Everything

On January 9, 2007, the very first iPhone was announced, and everything changed. Now, people can get the knowledge they need quickly and easily; anything you want to know can be found in seconds. And with more information available, people are able to do more research before making important decisions.

Beyond access to knowledge, smartphones also give people the ability to take action from the palm of their hand. They can read Amazon reviews to research a product, then purchase it with a single click. They can download their bank’s app and have access to financial education, then put that education to use right away by making changes to their accounts. These interactions go well beyond simply becoming literate; instead, smartphones allow users to achieve proficiency and take immediate action.  

Moving Beyond Financial Literacy to Financial Capability

Consider a customer who is aware of both bank services and check-cashing services—the latter of which can be predatory, tacking on huge service fees. The customer already has the financial literacy to know that each option exists. But to achieve true financial capability, this hypothetical customer needs the confidence and strategic attitude to make the connection that a banking product would be a better choice for their long-term financial health.  

That’s why we think it’s time to replace financial literacy with a more impactful term: financial capability. Financial capability is the set of knowledge, attitudes, habits, and confidence in one’s ability to control one’s finances that a consumer needs to build his or her financial wellbeing. In other words, it’s not just a matter of being literate about your financial options—it’s having the capability to use that literacy to make good decisions.

In order to change the conversation surrounding financial education standards, we need to change the industry expectations. So, in April 2018, let’s not celebrate Financial Literacy Month anymore. Instead, let’s raise the bar.  Let’s plan a big, impactful, and action-oriented month.  Let’s have Financial Capability Month.

P.S. – Download our mini guide, Developing Financial Capability Across Every Stage of Life: Why Financial Education Should Start Early, to learn how your financial institution can improve its financial education initiatives.

Financial Marketing and Millennials: By the Numbers

For financial institutions seeking to attract the millennial demographic, using technology is the key—especially technology that is optimized for mobile devices. Not convinced? Here are some mind-blowing statistics around millennials and mobile that you should know to influence your financial marketing strategy:

Financial marketers looking to engage millennials must leverage mobile technology as part of their financial marketing strategy.

Financial marketers focused on engaging millennials must leverage mobile technology as part of their financial marketing strategy.

  • Millennials (people between the ages of 18 and 34) have the highest rate of mobile usage of any other demographic.
  • A whopping 97% of millennials have used a mobile device to access online content. For 1/5 of millennials, mobile devices are the only way they access the Web.[1]
  • The average adult checks their phone 30 times a day. That sounds like a lot. But the average millennial checks their phone more than 150 times a day![2]
  • Does your website work well on all devices? Because 40% of people will abandon their first choice of a search result if it isn’t mobile friendly.[3]
  • Are your emails optimized for mobile, as well? We hope so, because 91% of people checking email on their phones will ignore marketing emails if they are not optimized or linking to pages that are mobile-friendly.[4]
  • When it comes to financial education, we here at EverFi found that 36% of our adult users used their phones to access our financial education content—in 2017 alone.
  • Does your bank or credit union offer financial education? Because millennials are 24% more likely than Baby Boomers to value financial education from their bank as an important feature.[5]

Taken together, these statistic make it clearer than ever: banks and credit unions that want to attract millennials should be focusing on providing a great mobile experience for this demographic.

For more information on how to connect with this “mobile generation,” download our new white paper, The Financial Marketer’s Guide to Acquiring Millennial Consumers Through Mobile.

 

[1] 2016 U.S. Cross-Platform Future in Focus. (n.d.). Retrieved December 16, 2016, from http://www.comscore.com/ Insights/Presentations-and-Whitepapers/2016/2016-US-Cross-Platform-Future-in-Focus

[2] SMW Staff (2016). Millennials Check Their Phones More Than 157 Times Per Day | Social Media Week. Retrieved February 23, 2017, from https://socialmediaweek.org/newyork/2016/05/31/millennials-check-phones-157-timesper-day

[3] De, D. (n.d.). Financial services in a mobile-fi rst world. Retrieved December 16, 2016, from http://forum2016.com/ wp-content/uploads/presentations/Financial_Services_In_a_Mobile_First_World.pdf

[4] Van Rije, J. (n.d.). The ultimate mobile email statistics overview. Retrieved December 16, 2016, from http://www. emailmonday.com/mobile-email-usage-statistics

[5] Study: Millennials Value Financial Education, Guidance and Mobile Account Access from Their Financial Services Providers. (2016). Retrieved December 16, 2016, from http://www.prnewswire.com/news-releases/study-millennials-value-fi nancial-education-guidance-and-mobile-account-access-from-their-fi nancial-services-providers-300346661.html

Marketing to Millennials: What Not to Do

As the millennial generation ages into more prominent jobs and accumulates greater wealth, banks and credit unions are quickly realizing they need to improve their financial marketing strategy to attract this elusive demographic. But despite the fact that this generation seems to be online at all times, it takes more than a fancy website to make a connection. While many financial institutions have been online for years, attracting millennials requires a full understanding of this demographic to drive impact.

Millennials learn and bank differently than previous generations. Learn how your financial institution can attract this elusive demographic.

Millennials learn and bank differently than previous generations. Learn how your financial institution can attract this elusive demographic.

Here are two of the most common financial marketing mistakes that banks and credit unions make targeting millennials:

  • Neglecting Mobile

Always on-the-go, millennials today are more likely to be surfing the Web on a device than they are on a computer. Yet many financial institutions still neglect to ensure that their websites and marketing materials are optimized for mobile devices. When designing anything that will live online, from website menus to online programs, ensure that your designs are compatible with mobile devices of all sizes—and will work in different browser types (including Chrome, Safari, Firefox, and IE). Better yet, consider designing for mobile from the start.

  • Overly Long or Text-based Content

Millennials are fast-moving multitaskers. They want to maximize the “downtime” in the cracks and crevices as they move through their daily life: sitting on the metro, waiting for a friend at a bar, or even in the final moments before drifting off to sleep. Help them do that my creating content that is short and to-the-point. For best results, consider infographics, videos, and short, crisp articles that relay maximum information.

How To Improve Your Millennial Marketing Strategy

Banks and credit unions that want to connect with the millennial generation would be wise to meet them where they are—which, today, is online as they’re out and about. But it has to be done right. For more tips on how to avoid marketing pitfalls, check out our mini-guide

 

SOS: Why Your Financial Marketing Strategy Needs Saving

The internet is awash in articles about digital marketing, but many banks and credit unions are still not taking full advantage of technology to connect with customers and prospects. But today, if you are not leveraging technology to make your services as accessible as possible, you’re losing out to the competition. Let’s take a look at three important points on why financial institutions need to incorporate technology into their financial marketing strategy:

93 percent of 13-year olds check social media at least once daily. Learn why financial institutions need to incorporate digital into their financial marketing strategy.

93 percent of 13-year olds check social media at least once daily. Learn why financial institutions need to incorporate digital into their financial marketing strategy.

Consumption of technology is only increasing over time

While the millennial generation started the trend for technology usage, the following generations are rapidly outpacing them. According to a recent report, the average tween spends nine hours a day on an electronic device, and another study found that 93 percent of 13-year olds check social media at least once daily. Financial institutions that want to attract the newer generations need to be maximizing technology now.

New players are entering the financial playing field

Technology has allowed non-traditional entities to compete in the financial space. These new players often have no actual brick-and-mortar branch—instead, they offer instant access via websites and mobile apps. Consumers are already turning to these non-traditional entities to pay bills, transfer money online, and search for loans.

It’s not too late to join the digital revolution, but it soon will be. Banks and credit unions still have an advantage—trusted brand names and connections with Baby Boomers and Generation Xers who may advise their children to use the same institution. But the time to act is now. Financial institutions that ignore these new players and new technologies risk becoming irrelevant in the near future.

Financial institutions are positioned to take advantage of digital financial education

Banks and credit unions have another built-in advantage: financial education. Since brick-and-mortar financial institutions are already considered trusted sources of information, they should be leveraging this trust to offer financial education as a way to reach current and prospective customers. Programming that is highly relevant to consumers’ needs and available in real-time via a range of devices allows consumers to learn when they’re standing in line or sitting on the subway. Technology allows consumers to reach you anytime, anywhere—and your financial education should do the same.

For more information on how to leverage technology as part of your financial marketing strategy to reach new customers, download 10 Key Imperatives of Financial Digital Marketing: A Financial Services Marketing Guide for Improving Your Millennial and Consumer Engagement Strategy.

Uplift and Enlighten: Community Financial Education

For Washington Federal, giving back to the community is a vital part of their company mission. And by teaming up with EverFi, Washington Federal was able to create an outreach program that delivers community financial education to those who need it the most.

8,000 students taught. 37,000 hours trained. One underserved community reached. Learn how Washington Federal gives back with community financial education.

Download our guide, Supporting Communities Through Financial Education, to learn more.

Individual employees play a key role in the bank’s outreach program, as they have first-hand knowledge of what the needs in their own communities are. EverFi makes it easy for employees to volunteer by setting up visits and providing learning modules tailored to specific demographics—whether it be seniors, low-income families, or college students. As Ann Hall, vice president of community relations, puts it, “EverFi takes care of so much, so that we can go out and do what we do best: help our community improve their financial decision making – especially with those who need it most.”

Washington Federal knows that it is also critical to reach the next generation, so EverFi helped the bank launch the Washington Federal Financial Scholars Program, which offers online financial education programming to schools at no cost. To date, the program has reached more than 8,000 students who have completed more than 37,000 hours of training. And the work is clearly paying off—at the end of the program, students showed an average improvement of 87 percent in financial knowledge.

With the ability to provide accessible, high-quality online financial education through their partnership with EverFi, Washington Federal now has the freedom to focus on what’s most important: helping the most vulnerable members of their communities improve their financial wellness.

To learn more about how EverFi can help your institution create a successful and meaningful community financial education program, request a free demo.