Harland Clarke Home

Does Your Financial Literacy Program Get an A+?

Banks and credit unions can do more to foster consumer education —
and enhance the bottom line

In an economic environment that makes the scrutiny of revenue necessary, there is one often overlooked area that provides a significant opportunity for banks and credit unions: financial literacy. Fact is, the financial literacy of your account holders can affect your bottom line.

"Does your literacy program get an A+?
Financial Literacy Programs:
Five Best Practices

  1. Create traffic.
    Use multiple sources to drive traffic to your website's consumer education modules, including social media (Twitter, Facebook, LinkedIn, blogs), print mailings and promotional materials (statement stuffers, newsletters), and front-line staff (tellers, branch managers). Include graphical links on appropriate web pages within your site.
  2. Professor Piggy Bank
  3. Educate staff.
    Make sure that your branch employees are aware of the consumer education modules your institution has available and that they know how to use them. Branch employees are the face of your institution — and your allies in educating account holders.
  4. Reach out.
    Partner with local business leaders, schools and community groups to develop targeted financial literacy campaigns.
  5. Cross-promote.
    Tie the consumer education modules to current promotions. For example, a youth marketing campaign might highlight the Understanding Your Money and Checking Account Basics modules.
  6. Start now.
    The sooner you invest in a financial literacy campaign, the sooner you and your account holders reap the benefits.

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

That is why Harland Clarke recently announced its newly expanded and updated consumer education portal, a turnkey collection of more than 40 interactive online modules developed with the goal of improving account holder financial literacy. Designed to integrate seamlessly into a bank's or credit union's website, each module can be viewed at the account holder's own pace and takes 10 to 15 minutes, at most, to complete.

The timing couldn't be better for the release of this new portal. According to The National Foundation for Credit Counseling's 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. And more than one-third of respondents (34 percent) 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, leaving significant room for improvement.

Furthermore, this same survey reveals that "home" is the most commonly cited source for personal financial education. Only 6 percent said they learned the most about personal finance in school, suggesting an opportunity for banks and credit unions to help fill this gap.

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

Fortunately, banks and credit unions are starting to think more proactively about developing financial literacy programs for the public. The challenge, according to Moon, is that many institutions do not have the internal resources to create and run a full-blown program. That is where Harland Clarke's consumer education program fits in.

How the consumer education portal works

Financial institutions can embed links to the consumer education modules anywhere on their website, quickly and easily. "Once we give a financial institution access to the portal, it can decide where and how the modules will get the most views on its site," says Moon.

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 modules. "In this way, consumers have access to relevant, real-time training," adds 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 banks and 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.

Professor Pig 2

Financial literacy and the Community Reinvestment Act

But it is not enough to simply link to these educational modules from a website. "I have seen many sites where the information is very hard to find," says Moon. Ease of access and visibility are keys to success.

"If a financial institution does nothing to promote financial literacy education, it is not going to be much benefit to anyone," says Moon. 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 banking 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 banks and credit unions to develop community partnerships to help educate people who might otherwise have difficulty obtaining or using certain financial products," says Moon. "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 bank or 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."

Classes Offered

Credit and Loans

Buying a Home
Buying a New Car
Buying a Used Car
Choosing a Credit Card
Using Credit Cards   Wisely
Consolidate Debt
Credit Card Rules ~ New
Selling Your Home
Mortgage Financing
Loan Modification ~ New
Foreclosure ~ New
HARP ~ New

Consumer Protection

ID Theft
Check Fraud
Credit Card Fraud
Check 21 Act
Internet Scams
Telemarketing Scams
ATM Safety
Travel Tips
Safeguard Your   Valuables
Overdraft Protection ~   New

Financial ABCs

Using a Debit Card   Wisely
How to Establish Credit
Investment Basics
Checks vs. Money Orders
Online Bill Payer Services
Saving Money
Take Control of Your   Finances
Checking Account Basics

En Español

Aspectos Báscios de   Internet
Básicos de Las   Inversiones
Ahorrar Dinero y Su   Futuro
Financiero
Tome el Control de Sus
  Finanzas
Aspectos Básicos de las
  Cuentas de Cheques
Para Comprender Su   Dinero

Plan for the Future

Investing in the Next
  Generation
Investment Basics
Make Investments Work
Plan for Your Child's   Education

Youth Education

Balance Your Checkbook
Understanding Your
   Money
Using Credit Cards   Wisely
How to Establish Credit

Essentials

Credit Union Difference*
Share the Gift of
  Membership*
Computer Basics
Internet Basics
6 Calculators

*Credit union-specific modules

   

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