5 Key Financial Education Trends in 3Q21

Numerous surveys continue to highlight financial literacy gaps among U.S. adults and children, illustrating the ongoing need for financial education programs (according to a Step survey, 97% of teens believe that financial literacy is important). Many financial firms and their partners have been at the forefront in developing and distributing innovative financial education programs. The following are noteworthy financial education trends in the 3rd quarter of 2021.

  1. Build engagement with younger segments through financial education programs and content. Firms are looking at a wide range of channels to reach younger demographics:
    • HSBC created a new world in Minecraft – Fintropolis – designed to improve financial literacy.
    • Bank of America launched a 7-part series on YouTube that aims to share financial know-how with both parents and students.
  2. Develop financial education partnerships with associations and advocacy groups.
    • OneMain Financial partnered with EverFi to launch the Money LaunchPad financial literacy program for students in grades 9 to 12.
    • BancorpSouth committed $1.5 million to Operation HOPE for financial literacy programs and announced six additional HOPE Inside locations.
  3. Target specific consumer segments with financial education programs and thought leadership tailored to their unique needs, including:
    • LGBTQ: Capital One published an article, “The Debt Free Guys: Financial Obstacles Facing LGBTQ+ People”, and Ally published an article on “Financial Considerations for LGBTQ+ Couples.”
    • Couples: Ally Bank launched a marketing campaign targeting couples’ fears over the “Money Talk”, and Morgan Stanley listed “6 Money Questions to Ask Your Partner Before You Commit.”
    • Widows and Widowers: MassMutual published “A financial checklist for widows and widowers.”
  4. Brand financial education programs to bring together various financial education initiatives as well as raise consumer awareness and engagement. Recent examples:
    • Charles Schwab launched MoneyWise America™ program for teens.
    • Regions introduced the Next Step podcast, the latest resources from the bank’s Next Step financial education program.
    • Capital One launched the Money & Life program, which builds on its former Money Coaching program.
  5. Position financial education as part of broader ESG and CSR initiatives. Financial education efforts are now more prominently featured in financial firms’ annual ESG and corporate social responsibility (CSR) reports.

The Emergence of Employee Financial Wellness Programs

Over the past few years, financial institutions have significantly increased their investment in initiatives to grow consumer and small business financial literacy.  An even more recent development has been the emergence of workplace-based financial wellness programs: a 2018 survey by Strategic Benefit Services found that 59% of employers offer financial wellness programs or planned to do so.  And recent research by Alright Solutions found that 64% of employers say their organization’s financial wellness program is more important now than it was two years ago.

This rise of workplace financial wellness programs has been driven by several factors, including:

  • The overall growth of investment in financial education programs by the financial services sector in response to concerns about gaps in financial literacy levels, and the proven positive impact that financial education programs have in driving smarter financial behavior by consumers and small businesses.
  • Employer desire for additional benefits and services to attract and retain staff. 
  • Employee need for financial education: PwC’s 2018 Employee Financial Wellness Survey found that 41% of employees say their employer’s financial wellness plan has helped them get their spending under control.
  • Recognition of the value and critical role the workplace channel can play in teaching financial concepts, as well as in providing advice and potential solutions. 

Financial firms providing workplace financial wellness programs include banks, investment firms, and employee benefits providers.  Many of the leading firms in these sectors have launched new or enhanced existing financial wellness programs over the past year:

  • Principal launched Principal Milestones, which provides personalized information based on an online assessment.
  • MassMutual introduced MapMyFinances, a financial and benefits planning tool that features a financial wellness score.
  • Morgan Stanley Wealth Management launched an enhanced Financial Wellness Program for employees of mid-to-large sized corporations, which features a digital portal, a catalog of financial wellness materials, financial assessment as well as the option to collaborate with a Financial Advisor or through Morgan Stanley’s online investing program.
  • Prudential introduced a range of new financial wellness capabilities, including expanded digital and on-demand solutions, as well as needs-based and life-event solutions.

Unfortunately, financial wellness programs do not tend to be immediately embraced by employees.  This can be attributed to a number of factors, including a lack of interest among employees, perceived complexity of the programs, and the lack of resources to manage the program. To overcome these challenges, employers must clearly communicate to employees how they will benefit from engaging with the financial wellness program.  To that end, financial institutions need to support employers in marketing the program to employees. It’s also important to gather feedback from employers in order to enhance features and improve the user experience.

The growth in workplace financial wellness programs shows no sign of abating, and we expect financial institutions to further improve and differentiate their programs through new features and options (such as enhancing access to the program via digital channels), as well as continue to develop financial wellness-related content.

Strategies for Marketing Your Financial Literacy Program

As financial institutions seek to position themselves as trusted providers of financial advice and solutions, one of their key areas of focus is financial education.  Many of these firms have focused attention on establishing comprehensive financial education programs.  However, equal attention should be given to how these programs are communicated.  If you want to maximize the impact of your financial education program, consider the following methods to build client awareness and engagement.

  • Partner with national and local organizations seeking to grow financial literacy. Partnering with these organizations can take many forms, including publishing surveys or providing funding. In June 2017, Wells Fargo announced a $100,000 donation to Junior Achievement of Chicago.  Operation Hope has partnerships with a number of leading banks (including SunTrust, Regions Bank and First Tennessee Bank), who all offer the Operation Hope Inside financial well-being program in several of their branches.
  • Host or sponsor events.  Events constitute one of the key ways for firms to build direct engagement with their financial education programs.  Firms have many options on how they wish to scale and direct their investment.  MassMutual hosts FutureSmart Challenge events to provide financial education to middle school students, reaching 40,000 students in 17 cities to date.  In June 2017, SunTrust launched the “onUp on Tour” to promote its onUp movement in 45 cities.  And In October 2017, American Century Investments partnered with Investopedia to launch a Financial Fitness Tour, featuring a 45-foot bus, called “The Financial Coach.”  These firms have extended the impact of these live events with tweets and postings on online portals, and also host virtual events, including podcasts and webinars.
  • Generate engagement through games and contests.  In our highly interactive world, online games and contests can be very effective in enabling people, especially the younger demographic, to gain important financial knowledge in entertaining ways.  For the past four years, H&R Block has been running the H&R Block Budget Challenge, an online game that teachers can use to teach financial concepts to high school students.  In December 2017, The Hartford partnered with Junior Achievement USA to launch JA MyBiz Builder, an online experience that teaches entrepreneurial concepts to teens.  And GOBankingRates recently launched a competition (with a top prize of $1,000) to identify the best tips, tricks and tactics for navigating one’s personal finances.
  • Reinforce the financial education message via social media.  A number of financial firms are using Twitter hashtags to generate interaction around their financial education programs. Examples include Ally Financial’s #WalletWiseWednesday twitter series and Regions Bank’s @FinancialFitness hashtag (part of its Financial Fitness Fridays program).  Other ways of using social media to promote financial education include events (Jump$tart Coalition’s Facebook Live event to discuss deposit insurance) and social communities (Canvas Designed by Citi, a beta-testing community that enables Citi customers to co-create products and digital capabilities promoting financial wellness).
  • Leverage online and mobile banking platforms.  As consumers become comfortable with using online and mobile banking to perform a wide range of financial activities, some providers are starting to incorporate financial education tools into these platforms.  Bank of America recently added a money management and financial education tool into its mobile banking platform.  And Wells Fargo is planning to launch Greenhouse by Wells Fargo, a mobile banking experience that includes financial management tools.