5 Tips to Reach Millenials Through Financial Education

5 Tips to Reach Millennials Through Financial Education

Financial institutions are realizing that they must embrace innovative methods to engage with their audiences—and nowhere is this more true than with the millennial generation. As a demographic that is both less likely to seek professional financial advice and more likely to score low on financial literacy tests, providing millennials with technological options for receiving financial education—anytime, anywhere—is becoming a critical way for financial institutions to connect with this critical audience.

5 Tips to Connect With Millennials Through Financial Educuation

Download our report Reaching Millennial Consumers: Using Financial Education as Content Marketing

Here are five tips for connecting with millennials through financial education:  

Keep it short

Long lectures and lengthy programs aren’t likely to capture short attention spans. Leave it quick and to the point.

Make it relevant

Don’t bombard your audiences with information that isn’t relevant to their current stage of life. Instead, target current needs, like building credit and starting savings accounts.

Embrace mobile

For the generation that grew up with cell phones, if something’s not available on mobile, it might as well not exist. Optimizing education programs for mobile devices means that millennials can learn anytime, anywhere—whether commuting on the subway or standing in line at the grocery store.

Be authentic

Millennials value authentic interactions and are more likely to spot disingenuous intentions and “salesy” tactics. Here’s the good news: they’re also more likely to act as brand ambassadors for companies and organizations they believe in. Be informative and helpful—not solicitous—and you’ll be building a customer for life.

Don’t push

Since millennials tend to be marketing-savvy, be careful with how much you attempt to push or upsell early on. Rather than attempting to sell to them outright, allow your informative content to earn their trust, and then target only the most relevant offerings to them.

Research shows the millennial generation to be bright, open, and eager to expand its financial capability. When done well, financial education programs can connect with millennials and build lasting relationships.

To learn more about using financial education as a method of content marketing, download our report Reaching Millennial Consumers: Using Financial Education as Content Marketing.

4 Solutions to Reach Underbanked Communities

4 Solutions to Reach Underbanked Communities

For banks and financial institutions, engaging underbanked communities is key to spreading financial education and maintaining compliance under the Community Reinvestment Act (CRA). Fortunately, by leveraging technology and embracing the needs of students and young adults, reaching underbanked communities has never been more possible.

Download Guide: 4 Solutions to Reach Underbanked Communities

Download our free guidebook, Technology is the New Branch: 4 Solutions to Reach Underbanked Communities, and learn about the trends, statistics, and strategies that will help you better meet the financial needs of your community.

Here are four solutions for using financial education to connect with the underbanked:

  1. Go mobile. Mobile usage has skyrocketed over the last several years, but enacting a comprehensive mobile strategy for financial education is especially important for reaching people with low-to-moderate incomes. Since smartphones are less expensive than computers and can perform most of the same functions, many use them as their main source of technology.
  2. Scale with digital. To reach more people in a way that is both scalable and cost effective, embrace digital learning. By providing financial education programs online or through an app, more people can have access to the information they need.
  3. Break down language barriers. A 2014 study by the National Council of La Raza found that 33 percent of Spanish speakers selected their bank with language accessibility in mind. Offering financial education solutions in multiple languages helps eliminate these barriers.
  4. Think beyond credit scores. According to FICO, 53 million people—the majority of whom are millennials or low-to-moderate income households—don’t have a credit score, making this standard that banks and credit unions use to evaluate consumers problematic. Instead, certificates and test scores for financial education courses could be used to determine credit risks for underbanked populations.

Employing strategies to reach underbanked communities means the next generation will be more informed and confident about their financial decision-making—and these four solutions are a great place to start. Learn more about how your financial institution can better reach underbanked communities.

To learn more about EverFi, visit us at EverFi.com/FinancialEd.

How to Develop a Company Code of Conduct

Simply having a company code of conduct is not enough. Research has found that the process an organization follows to develop a code of conduct can impact its effectiveness (Schwartz, 2008). Researchers have also suggested that the implementation process is an important factor in creating an ethical culture.

“Code of conduct” and “code of ethics” are terms that are used interchangeably and, in fact, they are called many different things, which Schwartz collectively defines as follows:

A business code is a distinct and formal document containing a set of prescriptions developed by and for a company to guide present and future behavior on multiple issues of at least its managers and employees toward one another, the company, external stakeholders and/or society in general.

In a previous post, we described the “hallmarks of an effective compliance and ethics program” as outlined by the US Department of Justice and Securities and Exchange Commission. In this post, we’ll look at how to develop code content that reflects your organization’s values and risk tolerance, and ways to implement its provisions to increase their effectiveness.

Code of Conduct Development Process

Establish the Purpose

The first step in developing a company code of conduct is to establish the purpose of the codes and why they matter. In a KPMG survey of Fortune Global 200 companies, the three most common reasons for adopting business codes were to comply with legal requirements, create a shared company culture, and protect and improve the organization’s reputation. KPMG’s survey also found that the most commonly cited core values of Fortune Global 200 companies are integrity, teamwork, respect, innovation, and client focus. Schwartz also recommended that code provisions should be consistent with “six universal moral values” (trustworthiness, respect, responsibility, fairness, caring, and citizenship), which should prevail over financial objectives.

Understand Your Risks

Once the purpose is established, the framework for developing a code requires a full understanding of the operational and reputational risks an organization faces. These issues define the organization’s objectives when developing code content, policies, communication, and training that address individual and collective responsibilities regarding risk management.

To achieve the organization’s risk management standards it is important to draft a code that clearly states expectations and guidelines for acceptable behavior, and provides options for seeking advice and for reporting concerns or suspected misconduct. In his research on the many dimensions of code development, Schwartz found that employees, managers, and ethics officers consider codes more effective when they are readable, relevant, and have a positive tone.

Chose Your Language

In addition, choosing your language carefully is important, as the authors of an article analyzing Lehman Brothers’ Code of Ethics concluded: “finding the right words to express ideas and behaviors is a key strategic action for an organization.” The authors studied Lehman Brothers’ code using the Competing Values Framework (CVF) to reveal the rhetorical elements of the message, and the Erwin method to rate the code’s tone, readability, and style. They found that Lehman Brothers’ code’s strengths were on the relational (trust) and informational (facts) side, as opposed to the transformational (change) and instructional (action) side, of the CVF. This led to their conclusion that:

The Lehman code of ethics and internal code of conduct do not offer much vision or guidance to the reader. . . . While it lays out the basic rules expected of all Lehman employees, executives missed the opportunity to create a unique code expressing strong ethical principles. A more transformational code might have identified their unique strengths and values, but this would have to be coupled with transformational leadership and a culture of strong communication. The Lehman code did a basic job of protecting the organization against illegal actions by employees, but it did little to advance an ethical culture that might have sustained them.

Additional Guidance for Employees

One of the things the authors found lacking was guidance for employees who are faced with difficult decisions. The American Management Association proposes using the code of conduct to guide employees who are conducting business and making decisions in business dealings and relationships around the globe, by simply recommending that employees ask themselves two questions:

  1. Does this comply with the law, the Code of Conduct and the company’s policies?
  2. How would customers, shareholders, general public and co-workers view it?
    .

Best Practices for Drafting Codes of Conduct

The best practices for drafting codes of conduct that emerge from these studies include:

  • Obtain buy-in across the organization with input from a multidisciplinary team
  • Include the organization’s mission statement, vision, and values that reflect its commitment to ethics, integrity, and quality
  • Clarify that the organization expects individuals to act with honesty and integrity in addition to compliance with legal requirements
  • Describe expected behaviors rather than stating prohibitions
  • Cover relevant risks, employment practices, protecting corporate assets, and managing third-party relationships
  • Make it user friendly and applicable to all individuals covered by the code
  • Use simple, concise, and easily understood language (and provide translated versions as needed)
  • Describe enforcement and disciplinary procedures
  • Solicit feedback on the code from all levels of the organization
  • Update to improve content and address new issues or risk areas
    .

But the mere existence of a code of ethics, without more, will not create a sense of shared values and commitment to ethical behavior.

Implementing Your Company Code of Conduct

Based on their analysis of the effect that Lehman Brothers’ code of ethics had on its corporate culture, the authors concluded that “silence can be deadly,” “codes fail when poorly communicated,” and “codes themselves cannot create ethical organizations.”

In fact, their research found that these two actions are key to code implementation:

  • Communicate codes through the right channels and explain why they’re important
  • Integrate codes into the organization’s practices and back it up with enforcement

Once drafted, an organization needs to embed the code into its culture. The KPMG report recommends that the code become a “living” document to guide and create ethical behavior throughout the organization through:

  • Communication and training
  • Personnel and other policy measures
  • Monitoring, auditing, and reporting

At the companies KPMG surveyed, training courses were commonly used to:

  • Explain the importance of the code
  • Reinforce ethical behavior
  • Strengthen the moral compass
  • Identify and deal with dilemmas
  • Provide guidance on how to implement the code more effectively

At Lehman Brothers, the ethical code contained the phrase “compete aggressively in furthering the interests of the firm.” However, the authors raise the question of whether explaining to employees the level of acceptable risk in “competing aggressively” would have avoided leveraging the company “into a lethal situation.”

Effective implementation requires ethical leadership and support, training, and continuous reinforcement and updates to keep the code current. Ongoing administration and reinforcement of code standards embeds an organization’s values into its culture, which stimulates ethical reflection and action, and encourages compliance so that employees speak up when they see others engaging in unethical behavior. And for the skeptics who question whether an effective company code of conduct is worth all this effort, the bottom line is that good ethics are good for business.

LawRoom (powered by EverFi) delivers online compliance courses to help your business meet compliance requirements both dynamically and scalably. In addition to our award-winning online courses, LawRoom delivers a robust, cloud-based learning management system to help you easily deploy and track our growing library of ethics, anti-harassment, data security and employee conduct courses.

The Future of Community Reinvestment Act Compliance

The Future of Community Reinvestment Act Compliance

Since Congress signed the Community Reinvestment Act (CRA) in 1977, financial institutions have had a legal obligation to provide banking access and education to communities—particularly underbanked communities—within their geographic footprint. That obligation has not changed over the years, but the communities, as well and the ways in which financial institutions meet their needs, has. This relationship will continue evolve alongside technology. Here’s what the CRA future has in store.

Download Our Guide the Evolving Bank Branch: A Look at Tomorrow’s Community, Technology, and CRA

Download Our Guide the Evolving Bank Branch: A Look at Tomorrow’s Community, Technology, and CRA

 

Streamlined evaluation process

Technology has offered companies unprecedented access to data—and that data is becoming easier to gather, sort, and transmit. This will allow for a much simpler evaluation process and, potentially, an automated data collection system that would make the reporting and compliance process easier and more transparent for both FIs and regulators.

Increased access to financial education

Financial education is crucial to successfully engaging with underbanked communities and helping young people become financially capable; for FIs, providing that education is becoming easier and more accessible as technology improves. Not only does greater education accessibility help FIs maintain CRA compliance, but as financial education service platforms become more personalized and customized, more data can be collected about individual learners. This will help FIs measure both the effectiveness of their programs and the financial wellness of their communities.

Greater focus on the the individual

Thanks to this increased ease of data collection, expect the requirements of the Community Reinvestment Act to become significantly more individualized in scope. With so much information about the individual available, it’s likely that financial capability will be determined by more than just a credit score. Instead, FIs can determine loan risks on a more individualized basis, allowing for a greater number of underbanked populations to qualify for services.

Data-driven processes and predictive analytics are already changing the playing field. In the future, expect these two factors to play an increased role in not only how CRA regulators evaluate compliance, but how FIs engage with the communities they serve as well.

To learn more about how FIs can meet and exceed Community Reinvestment Act requirements through technology and financial education, visit EverFi.com/FinancialEd.