Why now is not the time to abandon financial literacy

Illuminated Personal Banking signage.

Caitlin Whyte, senior account manager

Financial literacy is not a new term. In fact, you can trace financial education programmes at major UK banks back to 2009, while Martin Lewis spearheaded a petition to make financial literacy compulsory in schools over a decade ago (in 2011). It was eventually added to the national curriculum for secondary schools back in 2014.

For many, focus on financial literacy has taken a back seat over the past couple of years, with comms teams instead focusing campaigns around ‘what Gen-Z want from a bank’ or the rise of ESG funds.

However, with the economic fallout from the Covid-19 pandemic, soaring inflation and record mortgage rates, there have been renewed concerns about the lack of financial literacy, particularly amongst younger generations.

More than a third of UK adults say that they don’t feel confident managing their money and nearly half of UK adults say that they need urgent help managing their day-to-day finances; a figure that has likely risen since this second survey was conducted back in January.

This cost-of-living crisis and the fast pace that new financial products are being launched into the market are heightening the need for better education.

While financial services companies have been key in providing financial literacy over the last decade, they are also now being critiqued for not doing enough. Recently the Bank of England addressed this criticism, pledging to promote a better and wider understanding of the work they do, while the FCA’s Consumer Duty will require retail financial services firms to ensure that they’re effectively explaining how their products and services actually work from mid-next year, arguing that the sector’s aim to educate doesn’t always align with how they communicate.

So, what can the sector be doing?

  1. Integrate, integrate, integrate

Historically companies have put money behind big campaigns that focus on financial education. While these can be great, you don’t have to pull out all the stops (or have a big budget) to support a push towards financial literacy.

Instead, think about integrating the principles of financial literacy into your existing work. Can you simplify the language in that product announcement? Could you add an explainer to the blog you’re writing?

Think about integrating financial education principles across all your communications, so that you embody them in everything you say and do.

  1. Forget the jargon

It might sound obvious, but when you work in a sector and have a deep understanding of it, it’s sometimes easy to forget how much jargon you use.

This is possibly most apparent when it comes to the array of terms used to describe ESG products, many of which are used interchangeably and mean totally different things from organisation to organisation.

If you’re in any doubt that something you’re talking about, or referring to, could be misinterpreted, then it is always best to explain it. Even better, consider whether using that word is necessary. Perhaps you are simply doing it through habit. Could a simpler and clearer word be used instead?

  1. Look after your own staff

Just because your staff work in financial services, it doesn’t mean that they wouldn’t be interested in some financial education, particularly given the current economic climate.

Actions speak louder than words so look after your own colleagues first, provide them with education and support, and then your credibility will grow. This can be as simple as a lunch and learn on a specific area of financial wellbeing, or you can go a step further and invest in tools for your employees. While your focus will be on your employees here, it can have an impact on your external image – something this tweet shows.

In these uncertain economic times, it is key to communicate transparently and with authenticity across everything you do, as it provides the foundation to build trust with your audience.

We most likely have a long economic storm ahead of us and financial services brands have an important role in supporting their customers, by helping them understand their finances, various products and by, crucially, providing and communicating actionable and easy solutions that will help relieve some of the financial pressure.

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