Most financial institutions and FinTechs often provide digital financial literacy programs for building robust relationships and strengthening them over time with their customers and network, and this aspect of finance is increasingly important today with the abundance of new digital banking services and tailored solutions. Research shows that financially literate consumers are more likely to express interest in trying out multiple products provided by FIs, which means that once customers are accustomed to a bank’s software or a FinTech’s app for example, it’s highly likely that this will result in more engagement with other products and services - and therefore more profit - for the likes of FIs and FinTechs.
This is what digital financial literacy programs aim to do; nurture relationships with current customers in terms of taking the time to explain and answer all their relevant questions through active participation, personalized tools and applications, in addition to providing helpful and informative onboarding processes for new FinTech and digital banking products.
Without further ado, here are some critical areas that institutions should focus on to leverage their digital financial literacy programs:
1) Kids/Youth Savings Innovative Applications and Tools
Younger generations that have been brought up in the digital age usually regard banking and finance as a complicated process that is hardly in line with their highly digitized lives, and so this presents an opportunity for FIs to adapt their digital financial literacy programs to target youth and kids, especially in the context of helping them with savings and wise spending habits in preparation for their future. Educating children today on maximizing their financial potential is a critical area for fostering the adults of tomorrow, and creating digital innovative saving tools and applications is the gateway for banks and FinTechs to reach and educate those tech-savvy young generation on various financial aspects like compounding interest, saving money and keeping track of their spending rituals, in a simple and gamified way.
The digital generation hardly knows any physical aspect of banking and money management, and so FIs need to leverage their online presence on that basis through establishing clear, useful communication through their social media channels, as well as creating email campaigns that target young parents that are hungry for knowledge as to how to secure their children’s future.
2) Budgeting Done Right
Any family or individual looking to take charge of their financial situations and ameliorate it on the long run cannot ignore basic budgeting as a fundamental skill. This can successfully happen through various budgeting and expenses monitoring applications, so that an individual can keep track of his expenses and earnings, and discover what expenses he can reduce and how he can better make use of his money. In addition to that, sharing budgeting tips and resources through online promotions, social media, email marketing, and any other digital channel is always a welcome strategy that allows FIs and FinTechs to connect and engage with their audience, acting as a reminder to make use of budgeting in their daily lives.
3) Credit Building
Building credit is another challenging aspect of finance that usually needs clarification and direct answers on a personal basis, and this presents yet another opportunity for FIs and FinTechs to offer digital financial literacy campaigns and tools around that matter. Customers need to understand how to determine if their credit score is good or bad, and what that entails for them and their future plans. They need to know how the process works, what bad credit means, and how they can fix it; something that is not often addressed when it comes to a bank’s or a FinTech’s communication efforts. Various apps now can pave the way through providing tips and tricks on how to build credit, aiming to make investing easy at your fingertips. Even more stock apps exist helping an individual learn about different stock market products, when to buy and sell so as to be an expert himself before being exposed to a real stock market.
4) Seniority and Fraud Protection
Perhaps an aspect of digital financial literacy that’s as important as educating minors and young students in money matters, seniors are often exposed to fraudulent activities and potential scams, especially today with the rise of digital banking and virtual processes that leaves them even more confused.
This gap is grounds for outstanding digital financial literacy efforts that can enlighten senior citizens and greatly solidify their loyalty to their banks or similar FIs. Educating our elders on safe banking and secure digital applications while being there for them to answer questions will yield great results on any financial organization’s digital literacy programs. Low-cost and easily attainable online resources like chatbots and application forms should be made available with the greatest ease to allow senior customers, their families or caregivers carry on their financial activities with minimal hassle and effort.
As important as digital financial literacy programs are for financial institutions and FinTechs to cater to their audiences, there is always room for improvement and better service, enabled by the power of technology nowadays and the many benefits that it brings to finance and banking. These strategies could prove to be exactly what organizations lack to strengthen their relationships and improve their customers’ loyalty, in hopes of a more inclusive and literate financial ecosystem that leaves no one behind.
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