As financial products and services become increasingly intricate, the need for consumers of all ages to be well-informed and capable of making sound financial decisions grows exponentially. Financial institutions have an opportunity to foster long-term customer relationships and support their acquisition goals by investing in financial literacy education for both bank customers and K-12 students.
Here are the reasons why this is a strategic marketing move that not only benefits the consumer but also aligns with the institution’s larger business goals, creating a win-win scenario.
Build Trust and Credibility
One of the cornerstones of any successful business relationship is trust. Financial institutions can be viewed with a certain degree of skepticism due to past financial crises and scandals, and the safety and security of their customers is paramount. By investing in financial literacy education, these institutions can demonstrate their commitment to their customers’ well-being, thereby building trust and credibility. When customers perceive that a financial institution genuinely cares about their financial health, they are more likely to engage with and remain loyal to that institution.
Enhance Customer Loyalty
Customer loyalty is critical in the competitive world of financial services. Financial institutions that invest in their customers’ financial education are more likely to retain those customers over the long term. Educated customers are better equipped to appreciate the value of the products and services offered by their financial institution. They are also more likely to recognize the benefits of staying with a provider that has their best interests at heart. By empowering customers with financial knowledge, institutions can reduce churn rates. Additionally, institutions that invest in young people’s financial literacy are ultimately building brand affinity with the next generation. When they enter adulthood and start making more financial decisions on their own, that institution’s brand will likely come to mind.
Drive Product Adoption
A benefit of financial literacy education is that it can also drive the adoption of new products and services. When customers understand the full range of offerings and how they can benefit from them, they are more likely to take advantage of these products. This, in turn, can lead to increased revenue for the financial institution. For example, a customer who understands the benefits of a retirement savings plan or investment portfolio is more likely to enroll in these services. By providing education on various financial topics, institutions can guide their customers toward products and services that are well-suited to their needs. This not only enhances the customer experience but also ensures that customers are making choices that will benefit them in the long run.
Create Value-Added Services
To help differentiate an institution from its competitors, financial literacy education can lead to the creation of value-added services. By offering workshops, seminars, online courses, and other educational resources, financial institutions can provide additional value to their customers. These services can enhance the customer experience and create a competitive edge in the marketplace. Innovative marketing strategies that incorporate financial literacy can attract a broader audience. For example, partnering with schools, community organizations, and online platforms to deliver financial education can increase the institution’s visibility and reach. These collaborations can also strengthen the institution’s ties to the community and reinforce its commitment to financial empowerment.
Fulfill Corporate Social Responsibility
Corporate social responsibility (CSR) has become an essential aspect of modern business operations. By investing in financial literacy education, financial institutions can fulfill their CSR commitments. This investment can not only serve compliance requirements, but demonstrates a dedication to the community’s financial well-being, which can enhance the institution’s reputation and appeal to socially conscious consumers. Financial literacy initiatives can be highlighted in marketing campaigns, showcasing the institution’s commitment to making a difference. Prioritization of CSR also benefits Gen Z consumers because they are not only the most diverse demographic, but they care deeply about social issues and want the businesses they support to reflect similar values.
Mitigate Financial Risks
Financial literacy education can also help mitigate risks for both the customer and the institution. Customers who understand financial concepts are less likely to engage in risky behaviors, such as taking on excessive debt or falling victim to scams. This, in turn, reduces the likelihood of defaults and other negative outcomes that can impact the institution’s bottom line. Additionally, given that Gen Z is very entrepreneurial and interested in investing, they’ll be seeking education and institutions that can help them navigate turbulent economies. When individuals are equipped with the knowledge to manage their finances effectively, they are less likely to encounter financial difficulties. This stability benefits the institution by creating a more reliable and sustainable customer base.
Make Financial Literacy Your Next Marketing Strategy
By prioritizing financial education, institutions not only empower their customers but also position themselves for long-term success in an increasingly competitive industry. In the end, a well-informed customer is a loyal customer, and loyalty is the foundation of a thriving financial institution. Learn about EVERFI’s adult consumer financial education solutions here and how you can drive impact for the next generation in the classroom here.