Today, October 12th is National Savings Day and we want to highlight some troublesome facts: Americans are falling short when it comes to rainy day funds. According to a recent Bankrate Financial Security Index, 24% of adults – and 25% of Millennials – say they have no money saved for an emergency like a layoff or a medical bill. On top of that, just 31% of adults and 23% of Millennials have what’s considered an adequate savings cushion: enough to cover six months’ worth of unanticipated expenses.
National Savings Day represents a great opportunity to think about your institution’s strategies and how they can be geared towards helping consumers save more effectively. Here are five ways that your financial institution can help accountholders build their savings:
- Incentivize savings accounts. Cash perks, rate bonuses, gift cards or prize-linked account features are powerful tools to attract new accounts and help retain existing ones – and they incentivize positive saving behaviors, as well. Kick it up a notch by rewarding your customers for taking proactive steps to opening a savings account, making consecutive deposits, or not withdrawing funds for a period of time.
- Reach out to Millennials in new ways. These digital natives gravitate toward mobile-banking apps that help them do the right thing – from analyzing daily spending and savings targets to setting up savings buckets where they can allot cash for big-ticket plans, like a car or a trip. These user-friendly tools also can link to social networks, where reminders and visual representations of their progress can be shared. Streamlining your posting of targeted savings messages across multiple platforms covers all the bases. Smart, visual aesthetics – whether they are graphic illustrations or short videos – will engage Millennials and demonstrate how your institution is different when it comes to partnering in savings.
- Implement a financial education program. Helping customers learn about savings options that may work best for them should be a cornerstone of any financial institution’s marketing strategy. In fact, a recent EVERFI survey found that 89% of banks and credit unions rely on financial education as a part of their digital marketing strategy, while 45% plan to increase their budget in this area. To be effective, financial education must meet a current need and must reach accountholders at appropriate milestones, as they make important life decisions – online learning programs are the way to do this effectively. Quick, relevant lessons on savings topics that resonate with the community you serve can secure trusted relationships – and ultimately encourage long-term savers within your product array.
- Train employees to talk about savings with customers. 60% of great banking experiences are due to great staff, and 46% of your customers will rely on your employees to select products for them, according to PwC’s Retail Banking 2020 report. That’s why a firm grasp of savings product knowledge and an ability to assess accountholder financial status are critical skills for staff to possess. If a customer has a high cash balance on a checking account, for example, your associate could cross-sell a high-yield savings account or certificate-of-deposit. Along with inspiring accountholder savings, these types of personalized, relationship-building methods can boost your institution’s wallet share – earning more of each customer’s total business by guiding them to more effective savings products.
- Publicize automatic savings options. Automatic funds transfer programs offer an effortless way to build savings, yet only 40% of Americans participate in automatic savings outside of work. Perhaps that’s why the FDIC annually reminds financial institutions to promote this simple savings strategy. Provide options for customers to set up recurring transfers from checking accounts to savings accounts, and then take the idea one step further with a “spare change” program. These programs round up debit card purchases to the nearest dollar amount and transfer the difference into a savings account. Boost the habit even more by offering rewards – typically a percentage of the amount rounded up (with an annual cap).
National Savings Day is a great day to reflect on how your financial institution can continue the good work you have already started. Getting consumers to think about their savings potential – how much they can realistically set aside each month after essential expenses – leads to positive action that helps build up the personal financial reserves they need. Having digital financial education programs and mobile app tools available to educate accountholders about savings – will also have a benefit of savvier and more invested customers. Learn more about how your institution can help customers build financial capability and reach consumers in meaningful ways with EVERFI’s Financial Capability Network.