“Financial wellness” is a familiar concept, especially when it comes to banking and insurance. Everyone wants their customers and members to live lives full of abundance, but what if this now-ubiquitous phrase doesn’t tell the whole story?
Consumers are getting more in tune with their financial lives than ever before. With fintech startups disrupting longstanding practices, new technology enabling people to manage their money in fresh ways, and a myriad of options when it comes to who people bank with and how they interact with them, it’s time to reimagine this concept with the individual at the forefront.
What do we mean by that? Well, let’s take a look…
How is financial empowerment different from financial wellness and financial literacy?
Financial empowerment represents going beyond financial literacy and financial wellness to feel confident and in control of one’s financial picture, not merely aware of it.
At a base level, financial literacy means having the knowledge to make decisions about money. Taken a step further, financial wellness involves putting that knowledge into action e.g., paying off debt, investing for retirement, and becoming properly insured for an individual’s lifestyle.
Finally, financial empowerment means having the knowledge, putting it into action, and then gaining a sense of independence that allows a person to be proactive and truly confident in their financial decisions. From here on out, we’ll refer to this concept as financial wellness 2.0.
The question then becomes: How can financial institutions foster this sense of empowerment for their customers? And why is striving for a state of financial wellness 2.0 important?
The benefits of thinking differently about financial wellness
Financial wellness and all that it entails has always been important, and that will continue to be true. However, as the concept moves into check-the-box territory for many organizations, there’s a huge opportunity for innovative institutions to level up their customer experience (and their retention) by placing the emphasis on empowerment.
A more granular customer journey
Adopting a financial wellness 2.0 approach that champions empowerment offers opportunities to expand your customer journey and engage with consumers in new ways. This might mean creating more granular steps for people to interact with or including touch points that are currently underserved or have yet to be addressed.
For example, it’s one thing to provide financial education on your website. Merely having these resources promotes financial literacy and wellness, but you can take it a step further by using customer data to recommend personalized content around the actions a customer takes or the types of accounts they have.
This type of proactivity creates more opportunities for people to engage with and learn from your brand using existing content that’s specifically relevant to them.
A better way to build relationships
Following the thread of our previous example, providing resources to help people learn and grow is also an excellent way to build relationships, increase customer trust and loyalty, and encourage people to engage with your platform regularly.
People want to learn more about their financial picture to be successful, and they are eager to accept help. In fact, research shows that an astonishing 85% of consumers say they strongly desire to become more aware of their financial picture. Not only can you be the one to help them do that, but it’s actually necessary to staying ahead of the competition posed by digital banks and fintech startups.
Half of consumers surveyed say their banking relationship is not rewarding nor do they feel emotionally connected to their bank. This fact coupled with peoples’ desire to be more involved in their finances represents an amazing opportunity to step in and become that trusted partner.
A measurable impact that creates more value
What does all of this lead to as a business? In short: More value for you and for your customers.
Growing with customers on their path to financial empowerment creates a feedback loop of customer engagement, which leads to establishing trust and credibility, which leads to amassing customer loyalty. Success in this process breeds even more engagement (ideally further along in the customer journey), which ultimately leads to more revenue and a higher customer lifetime value.
Mapping out the road ahead
No one knows your organization better than you do. Take the time to revisit your customer journey to assess what you’re doing well, what could be improved, and what new touch points you want to create with a financial wellness 2.0 mindset leading the way.
The main thrust is to meet people where they are on their financial journey—from those who are just beginning to mature in their financial lives to those who are building and preserving wealth.
Establishing more frequent touch points (and earlier) is an important part of meaningfully building customer relationships. And a key component of this is using personalization to offer just-in-time help in areas that are specific to each customer.
How we can help supercharge your financial wellness strategy
If during the discovery process you realize you want to expand your portfolio of financial protection products, we can help. Sign up for a Virtual Product Roadmap Walkthrough below, and we’d be happy to walk through the offerings that would be most helpful to your customers or members.