Financial education and overall “literacy” has been a topic of growing interest for banks for quite some time, but in 2020 it has become a rather hot topic. Financial education services, or FES, protection plans are becoming near-integral parts of customer support, outreach, and marketing for financial institutions thanks to multiple benefits for all parties.
For consumers, lately the need for financial literacy is growing virtually exponentially. Banks and other financial institutions that recognize this need and take the steps necessary to implement a FES protection plan are literally setting themselves and their customers up for success.
Let’s look at 7 benefits of having a FeS protection plan.
1. It Builds Trust
Consumers are facing more financial stress than they ever have. Couple that with a lack of any real financial knowledge and an FES protection plan can help you build trust and connect with your consumers. Furthermore it can help you address problems caused by financial illiteracy so that both your consumers and bank benefit.
2. Retirement Planning
Empowering your customers with stronger financial knowledge via a FES protection plan can help them understand exactly what they need to know regarding financial decisions on 401(k) plans and IRA accounts.
3. It Reduces Confusion
Developing a FES protection plan can help consumers navigate the increasingly tricky waters of creating personalized savings, retirement, and investment portfolios.
4. It Fosters Loyalty
Connecting early with consumers, even as early as utilizing K12 education programs, can help you show that your bank is directly interested and invested in helping all consumers in the community.
This helps attract new consumers and build loyalty over time. Additionally, as most of your current customers want to know that their bank is actively involved in outreach and community improvement, a strong FES protection plan helps you build loyalty with those that are already banking with you.
5. It Helps Develop Good Spending Habits
FES protection plans help consumers better understand their finances and their individual choices that are instrumental to good finances. This can help them develop better spending habits, purchasing or working within their buying power, and making smarter decisions regarding taking out loans and mortgages they can meet, as well as paying day-to-day bills on time.
6. It Helps Reduce Credit Spending
Consumers with better financial education are generally able to make better financial decisions, increase their overall savings, pay their bills on time, invest wisely, and basically increase their wealth altogether. Those with lower financial literacy are known to spend more on average, make too many purchases on credit and pay unnecessary fees and fines, which over time results in lower levels of wealth.
7. It Connects You
These days, it’s pretty much imperative that consumers receive financial education from a young age. Helping them save and invest for their college years and beyond helps them build confidence and develop a life-changing skill. FES protection plans for students and young adults is one of the easiest ways to make connections with consumers that have the potential to become future customers, while ensuring that they have the tools they need in order to make good financial decisions.
Interesting related article: “The Importance of Financial Literacy.”