Financial literacy: Consumers look to banks for help
When it comes to teaching financial literacy, the UK doesn’t have a stellar record. In a recent Organisation for Economic Cooperation and Development (OECD) report, the UK was ranked 15th of 30 countries when it comes to teaching financial literacy – to put this into perspective, only 38% of people in the UK understand what inflation does.
Yet, despite these concerning statistics, the government’s investment in financial education continues to slow, having recently scaled back a £1 billion financial education programme due to be rolled out in schools across the country. This has created a vacuum in the educational resources available in the UK, which 50% of 16-24-year-olds are calling on banks to fill.
Using content to boost financial literacy
According to the London School of Economics, banks have a fine line to walk when it comes to educating consumers. If they put out too much information they risk overwhelming consumers and hindering the decision-making process. And equally, if they aren’t producing enough, or the right kind of content to satisfy consumers’ appetites, they risk becoming irrelevant in the education space. Banks need to think strategically about controlling the flow of content so that they engage consumers with the right level of detail at the right time – and also in the right format. The consumer landscape is shifting in three key ways that intersect – mobile, social media and real-time – and banks need to turn this to their advantage when it comes to the way they market their products and deliver additional support to their customers
How smartphones impact a content strategy
According to Deloitte, as of January 2017, 81% of the UK population owns a smartphone – and the average user checks his or her phone 22 times per day. Continuous access to apps, social channels and the internet in general has made the average consumer a short-term thinker. The number of consumer actions that could be performed in under a minute with the aid of a smartphone is staggering, from purchasing an item with PayPal to adding a few items to a basket on Amazon, and this provides some interesting opportunities and challenges for financial services companies.
Social media breeds expectation
Where there are smartphones, there are social media apps. According to a 2017 survey by Statista, 90% of millennials – a demographic banks are all competing over – use social media every day, and many of them would rather use Twitter or Facebook to contact their banks than go and stand in a queue or call a number. Millennials have grown up in a world where everything is ‘now’, and that same expectation extends to customer service and the educational resources a bank may offer. If a complaint or query is made via social media, consumers expect an instant response – and if a brand doesn’t deliver, its competitor will.
Real-time engagement leaves no room for error
Whether they seek it out or it’s served up to them, consumers now discover products and services in real-time, meaning they are building relationships with finance brands before they are even aware that they need their products. But this constant exposure to brand messages is something financial brands can capitalise on – by replacing brand messages, which consumers may or not be interested in, with educational content for which there is a genuine need.
Provided financial brands can connect with consumers on their terms, and explain financial products and concepts in a relatable way, the gap will begin to narrow.
How are financial services companies making the most of these consumer behaviours?
As technology and consumer behaviours have evolved, the gap that existed between brands and consumers has started to disappear. Where a bank would usually be a phone call or car ride away, they’re now in our pockets and in our living rooms. Atom is the UK’s first digital-only bank, with apps on iOS and Android. The lack of overheads for physical branches enables them to spend more resources on helping customers and enhancing their services.
As their chief marketing officer, Lisa Wood puts it, “We use technology to help customers understand simple things like when they’re going to be overdrawn. You can predict that in advance, so why not tell them in time?" Before the advent of online banking it was extremely difficult for consumers to keep track of this kind of information, and even today many banks rely on paper statements and letters to keep their customers informed. When it comes to educating consumers in the financial sector, even the simple things will have a huge impact on an audience hungry for support and the finance brands that are willing to provide it.