Does Your Financial Literacy Program Get an A+?

by Harland Clarke

In an economic environment that makes the scrutiny of revenue necessary, there is one oft overlooked opportunity for credit unions: financial literacy.

There is certainly room for improved financial literacy. According to the 2010 Consumer Financial Literacy Survey, nearly four in five adults (78 percent) said they would benefit from professional advice and answers to everyday financial questions, while 34 percent of respondents gave themselves a grade of C, D or F on their knowledge of personal finance. The average self-imposed grade fell in the B- to C+ range.

“Studies have shown that the more financially literate consumers are, the more likely they are to purchase financial products and services,” said Brandy Moon, a sales consultant with Harland Clarke Educational Services. “Education helps improve member retention and satisfaction, supports cross-sell efforts and increases product awareness.”

Harland Clarke recently released its newly expanded and updated consumer education portal, a turnkey collection of more than 40 interactive online modules to improve account holder financial literacy. Designed to integrate seamlessly into a credit union’s website, each module can be viewed at the member’s own pace and takes 10 – 15 minutes to complete.

“I would estimate that the vast majority of financial institutions are providing very little information that truly promotes financial literacy,” Moon added. “They may offer information about identity theft or phishing, but not much more.”

How the consumer education portal works
Financial institutions can embed links to the consumer education modules anywhere on their website, quickly and easily. They can then decide where and how the modules should be used to maximize their value.

In addition, the modules can be used to cross-sell and promote products. For example, the web page where an institution’s loan products are offered can include links to the Buying a New Car or Buying a Home module.

“In this way, consumers have access to relevant, real-time training,” said Moon. “They can get the knowledge they need while they are on a financial institution’s web page, ready to buy.”

Harland Clarke provides a certificate of completion for each module viewed, which credit unions can then use as an incentive to promote related services. For example, a financial institution might consider implementing a policy to make a $20 deposit to a person’s savings account for completing the Saving Money module.

Financial literacy and the Community Reinvestment Act
Importantly, it is not enough to simply link to these educational modules from a website. Ease of access and visibility are keys to success. 

For example, the consumer education modules can be part of larger-scale, community-based financial literacy programs that might include activities such as going into schools to teach students how to balance a checkbook or hosting financial management seminars for adults in under-served populations.

Indeed, financial literacy initiatives can help financial institutions comply with requirements of the Community Reinvestment Act, a federal law intended to encourage depository institutions to help meet the credit needs of the communities in which they operate. An institution’s participation in financial literacy programs may receive consideration under the Community Reinvestment Act if the programs include a community development purpose, such as services targeted toward low- and moderate-income individuals.

“This is a great way for credit unions to develop community partnerships to help educate people who might otherwise have difficulty obtaining or using certain financial products,” Moon explained. “Such programs help build good will and improve consumer trust, which are important assets, especially in a down economy.”

The overall goal is to get consumers to view their credit union as a resource for all their financial needs, including financial education. According to Moon, “The best thing financial institutions can do is think big picture.”

 

For more information on Harland Clarke’s consumer education portal, contact your account executive or visit harlandclarkeCED.com.

Posted in Advocacy News.