Today, many young adults are experiencing stress when faced with taking responsibility for their finances and planning for the future. This is because most lack the skills, knowledge and confidence to do so. Average student loan debt continues to climb to never-before-seen amounts, but many young adults know little beyond a transactional bank account.
As a result, many report feeling unprepared to manage their money and consider it the “most daunting challenge of college for nearly all students.” So what can financial institutions do to promote financial health and support their student customers?
Better Financial Literacy
There is no doubt our nation’s financial education is lacking, especially among the youngest generations. In fact, only a handful of states have a personal finance requirement for high school students. This means when students leave high school to pursue higher education, they often take out high levels of student loans due to lack of preparedness from their shortage of education, and often, this leaves students unsure of whom to turn to for financial advice.
And, with an unawareness of their financial options, the knowledge gap puts young adults at a disadvantage on their path to financial wellness. While this is a serious concern, it provides an incredible opportunity for banks and credit unions because consumers need improved financial literacy. With financial education, a door is opened for financial institutions to take initiative and fill that void.
Knowing how financial institutions can help starts with finding the disconnect between young adults wanting financial help and not being properly educated in the earlier stages of their lives. Financial institutions can address this need through providing consumers with educational content that can not only improve customers’ financial literacy but also their own retention and acquisition.
U.S. adults consume more than 10 hours of media content per day, according to Nielsen; knowing that can help financial institutions link consumers to content that is relevant and helpful. However, this goes beyond providing educational content — it’s important to let consumers know whether there is a bank product that can satisfy their needs and give the bank the opportunity to deepen the customer relationship.
Once financial institutions realize the disconnect and the aspiration for financial education from their younger audiences, they can bridge this gap by targeting their marketing efforts, providing content that will accommodate the needs of these consumers. Banks and credit unions can see a consumer’s habits and target their messaging and content accordingly. For example, if a consumer is interested in traveling and engaging on travel websites and making purchases toward their planned trip, then the financial institution can leverage marketing dollars to target that specific consumer to meet their wants and needs.
The power of targeted messaging is not only about being able to connect within mobile banking but also across multiple channels, further integrating marketing efforts into other areas. Banks and credit unions must think beyond traditional uses of mobile banking apps and use them as a platform to relay their message to their consumers, providing content that resonates with their consumers and grows deeper relationships.
To add to the quality of the customer experience, creating content that is easily consumable by users is important. Financial institutions have the knowledge to share, but many find it difficult to convey the information in a way that is easy for the consumer to understand. By offering content that is presented in an understandable way, financial institutions can form deeper connections with their customers and position themselves as mentors.
The Solution To The Education Problem
The Nielsen research shows that Gen Zers are spending more time on their phones, and there is no shortage of content for them to consume. Banks and credit unions should use this as an opportunity to reach young adults and students with content that fills a major gap in their education, teaching them financial literacy.
Essentially, financial institutions must start by realizing the need and desire for financial education in younger consumers. Then, they need to cater to these tech-savvy consumers by providing enhanced financial literacy with content that resonates with that audience, tailoring messaging and marketing across all available channels. By expanding beyond the traditional mobile banking experience and messaging, banks and credit unions can provide true value to their customers and stand out against the competition.