Thirty to forty million Americans have been removed from payrolls as a result of the coronavirus pandemic and related shutdowns. This is just the beginning. A March 2020 Gallup poll shows that 61% of Americans expect a recession and 52% say it’s very or somewhat likely their household will experience “major financial struggles” because of the pandemic. However, Gallup finds that those who are experiencing the most disruption from coronavirus are also the least likely to say their credit union (or bank) is looking out for their financial well-being.
It’s no secret, many people are stressed about paying bills and making ends meet. They’re checking balances more frequently and worried about the future. Prior to the coronavirus, many consumers had few reserves in the way of savings and now their financial pain is even greater. The good news is this crisis has prompted more folks to spend less, save more and are more willing to adopt new money habits. This need and want has been building long before the coronavirus.
A key finding of a Gallup survey of 11,809 adults a few years ago clearly demonstrated the following:
- Consumers want banks (equally applicable to credit unions) to improve their financial well-being, not just sell them products.
- When customers strongly agreed their banks looked out for their financial well-being, about 84% were fully engaged and none were actively disengaged.
- Unfortunately, only one in four respondents strongly agreed their banking institution looks out for their financial well-being.
What’s the take-away for banks and credit unions? How will this help you differentiate?
More than any other time, your customers need financial management advice (not just a product) now and for the future; they want a financial institution to help them improve their financial health (in addition to providing products) and they don’t feel financial providers are stepping up to the plate! Do we need to spell this out any more clearly?
To learn more about consumer challenges with financial wellness and the High Definition Banking® solution, click on Financial Wellness is a Revenue-Generating Opportunity.
Financial Wellness Versus Just Providing Products and Services
Like many financial providers, you are likely offering an array of flexible payment plans, loan options, and creative solutions to alleviate immediate financial stress. Certainly, this is much needed and appreciated by your customers or members and business owners. However, let’s be sure we are not simply applying a temporary band-aid to a wound that needs considerably more ongoing attention and care.
Gallup defines financial well-being as “managing one’s economic life to reduce stress and increase security”. This is all about our emotional relationship with money. Does it offer us hope or worry, enjoyment or limitations, confidence or uncertainty? Overall, data shows financial wellness is declining. Therefore, you have a unique opportunity beyond the coronavirus to provide ongoing support and education to increase peace of mind, improve financial stability and ensure loyalty and growth.
Why is this important? It’s quite simple. If you can truly help a customer or member improve their financial health and experience financial peace, it will solidify their relationship more than any product or app. Gallup research found that across every consumer banking segment — retail, insurance or wealth management — customers are most likely to feel their bank backs their financial wellness when they can strongly agree that the bank:
- Helps them reach their financial goals
- Understands their financial situation
- Makes it easy for them to manage their finances
- Helps them make better financial decisions
- Looks out for their financial well-being
- Offers solutions to meet their financial needs
- Puts their financial well-being ahead of the interests of the bank
- Has their best interests at heart is true differentiation!
Summary: you must get to know customers and members and tailor assistance
What Can You Do?
With strategic planning coming up this fall, we challenge you to rethink and redefine your sales model. Are your employees highly engaged and feel they can make a difference in the lives of your customers or members during and after the coronavirus pandemic? Don’t miss out on the growth opportunities that improving financial health in your customers or members offers your bank or credit union. Here are five things you can do:
- Elevate the role of your staff to financial partners and coaches armed with interactive tools and skilled in engaging customers or members to discuss budgets, goals, pains and dreams.
- Update your current sales and relationship management training to minimize product dumping. Include questions that diagnose financial health, uncover future goals and engage customers in deeper conversation. See the samples above.
- Take a hard look at your current incentive plan as it may be driving the wrong behaviors. Ultimately you want to grow share of wallet with each customer or member over time. In addition, be sure to recognize key activities such as pre-call planning and entering life events, anxieties, goals and dreams in the customer or member profile in your CRM.
- Include an objective in your strategic plan that your bank or credit union is committed to a relationship-building advice model and achieve financial wellness of your customers or members (and your staff).
Ask about our virtual and onsite (at some time in the future) financial coach training, Create a High Definition Customer Experience™.
To learn more about consumer challenges with financial wellness and the High Definition Banking® solution, click on Financial Wellness is a Revenue-Generating Opportunity
How We Can Help
If you like the idea of some of your staff helping customers or members improve their financial health, feel free to contact me. I will be happy to take some time to understand what you want to accomplish and provide guidance on how to avoid the pitfalls and make it a roaring success. Just click on Contact Barb or call me at (858) 674-5500 ext. 101. Learn about us at www.HighDefinitionBanking.com
Thanks for reading this post and sharing your observations!
Barb, I was just meeting with a member and we went over her money values survey, monthly budget and the financial wheel. SHE IS PUMPED about saving money, fulfilling her dream of buying a new house and creating financial stability for her family! She is going to go home, fill out the budget with her husband and is coming back for more coaching with me. She said, “I had no idea a bank did any of this. Thank you so much.” It makes me so happy to help a family this way. So glad I was able to take the financial coaching program!
— Email from a participant in the Financial Coaching Program
Without question, your excellent Financial Coaching program has done the most to excite, engage and empower our staff to help members achieve financial success and improve their well-being. The interactive tools make it easy for staff to engage members about their goals. In fact, rather than leave with just a product, our Financial Coaches ensure members leave with a plan to get them on track. Plus, our investment advisors are benefiting greatly from the increased referrals.
— BayPort Credit Union
P.S. I hope to be in your area in 2021 when the virus is contained. However, let’s do a virtual program now and help your customers achieve financial health!