This April is the 21st year celebrating Financial Literacy Month. Originating from Youth Financial Literacy Day, since 2004 it has expanded around the globe with the commitment to fostering financial knowledge. Financial literacy combines financial awareness, knowledge, skills, attitudes and behaviours in order to make good financial decisions. The aim being to empower individuals towards financial well-being which in turn leads to a more robust financial ecosystem. Low financial literacy is a key barrier to financial inclusion and these present opportunities for financial service providers including both traditional banks and neobanks.
The latest financial literacy research from 2024 shows us that:
- Men outperform women by 10%, indicating a persistent gender gap
- In the US, Asians and White Americans level of financial literacy are equal, whereas Black and Hispanics report lower
- Financial literacy is still low across the generations with Gen Z far behind
- According to Pew Research Center (PEW), 54% of US adults are confident in their literacy levels with the older generations ranking higher.
Why does this matter to banks? Aside from helping develop a deeper financial environment, financial literacy programmes help build loyalty and trust. It allows you to deliver a strong message that your bank is committed to helping customers and the community as a whole. Financial literacy goes beyond just individuals but to also small-medium enterprises. As a content marketing agency to financial services firms, Contentworks has worked closely with a number of fintechs to deliver effective educational resources and programmes. Check out some of our work here.
Financial Literacy is A Global Concern
According to the TIAA Institute-GFLEC Personal Finance Index (P-Fin Index), in 2024, only 40% of US adults correctly answered two out of five retirement fluency questions.
An article in Forbes notes that “people score the lowest when tested on the categories of investing, insurance and risk comprehension.” The statistics above combined with a possible upcoming recession, and the rise of retail investing, highlight the increased need for focus on investor education.
Meanwhile, across the Atlantic, The European Union’s Consumer Finance has identified these key reasons why financial literacy is important:
- Allows individuals to plan for the future
- Ability to make better decisions about what to do with their money
- Understand how to invest in capital markets to meet their needs.
Commissioner McGuinness at the Money Matters conference organised by the European Commission and the Belgian Financial Services and Markets Authority (FSMA) said
I want people to have that sense of confidence because we all need to take financial decisions that work for us and allow us achieve our goals. We need to assess risks involved when we buy financial products.
McGuiness noted that The Eurobarometer of 27 Member States showed some worrying replies from a personal and societal level:
- One in four people aged 18-24 years, have the lowest score in financial literacy
- Most people were not confident they would have enough money in their retirement to live comfortably
- Many household would not weather an unexpected income shock
- One in six people don’t have any emergency savings.
How to Build a Financial Literacy Programme for Your Bank
To build a strategic programme for your bank, you need to educate customers, foster trust and strengthen your relationships. Here are the steps you’ll need to take to create a programme that will deliver real value to your customers.
#1 Define Objectives and Audience
The first questions you will ask yourself are: who is your audience and what do you want to achieve? Identify who is your audience, what are the gaps in their knowledge and create content around that.
What are you trying to do?
- Increase financial awareness?
- Encourage healthy financial habits?
- Strengthen client engagement and brand loyalty?
Who is your audience and what do they want to know:
- Students or young professionals needing to learn the basics on budgeting and loads.
- Middle-aged clients looking to understand investment strategies and credit scores.
- SMEs wanting to better understand cashflow management and business credit.
- People heading towards retirement and looking into estate planning and low-risk investments.
#2 Create Engaging Educational Content
Some of the more proven approaches include:
- Live webinars on topics like budgeting and financial planning
- On demand resources including blogs, ‘how-to’ guides, explainer videos
- Interactive tools and widgets like calculators, savings trackers
- Personalised advice with AI recommendations based on client data.
Look to create a digital educational hub on your site where all these are placed. You can include downloadable budgets and investment checklists.
#3 Distribute Your Educational Content
Develop a social media calendar for your financial literacy. Share financial tips, short videos and success stories. Create regular email newsletters with actionable insights around financial literacy. Ensure you embed financial education tools into your banking app. Perhaps it’s a ‘Financial Tip of the Week’ pop up. If you still have bricks and mortar, how can you integrate that in your branches? Is it posters on the wall? Or in-branch coaching sessions? Don’t forget community engagement – can you partner with schools or tertiary institutions for outreach programmes?
Top tips for awesome content
- Make it relatable: use real-world examples to explain financial concepts
- Make it fun: use a gamified approach with quizzes and challenges with small rewards
- Simplify complex jargon: without dumbing down the content or condescending to your audience.
- Ensure compliance: accuracy, transparency, and disclosures are critical to both your regulators and your customers.
#4 Measure Your Success
Find out what’s working and do it again! At the same time, retire activities that are not meeting the objectives you identified at the start. Measurement doesn’t have to be complex, it can be as simple as:
- Engagement: downloads, app usage, webinar attendance, site traffic to your financial literacy hub, social media interactions
- Customer surveys: to assess improvement of their financial knowledge
- Data analytics to refine content based on customer feedback and behaviour, e.g. signups, account openings.
Building a comprehensive financial literacy centre for your brand can take a lot of resources. Ensuring accuracy and compliance is an added challenge. This is where Contentworks can step in to help. We’ve worked with global banks, fintechs and brokers to strategise and create effective content for their literacy programmes. Book a Zoom to get started.