NOTE: The opinions in this article are the author’s and do not necessarily represent the views of Shortlister
Everyone deserves access to the tools and services that can help them achieve financial security. But for too long, the financial services industry has failed to make these tools and services easily accessible to all. Myopically focused on serving higher net worth customers, we have neglected the needs of many who need financial support most and, at the same time, turned off those who are not interested in the investment game.
The fact is, financial stress is most Americans’ constant companion. Many do not own a home, and up to 40% live paycheck to paycheck. Faced with an unexpected expense, such as a $500 medical emergency, many have no savings to cushion the blow. To attend college, many of us must take on crippling student debt. For many, retirement is just a distant fantasy. Even those who have saved steadily have concerns about where they stand. And none of us wants to feel like we need a finance degree just to get our questions answered.
For providers of financial services, whether our goal is growth or social impact, or both, it is clear that we can no longer afford to ignore this extremely large group of customers who struggle with financial stress every day.
Thankfully, the idea that financial services should be accessible and affordable for all is an idea whose time has come. We see three important keys to unlocking financial success for all:
Financial success for all involves reaching underserved customers who, to a large extent, do not want to be engaged.
Discouraged and anxious, they must be inspired to hope. This is a big emotional barrier that will not be overcome by education or literacy alone. Fortunately, we can use proven behavior change techniques to unlock the habits, behaviors, and emotional barriers to individual financial health. For instance:
Traditional financial plans are overwhelming in scope and packed with confusing financial jargon. They do nothing to help customers move past feelings of being hopeless or stuck. To empower action and change, financial advice needs to be:
Offering customers a financial game plan in right-sized, personalized steps goes a long way towards making financial advice actionable, but when trying to reach historically disengaged customers, we’ve learned we need to meet them more than halfway. Essentially, we need great financial software that does the work of executing financial advice for them.
Several new trends in technology unlock this potential:
It is almost easier to see the benefits of AI on underserved communities through a global lens. In South Africa, the company DataProphet is helping insurance companies use machine-learning enabled chatbots to lower customer-service costs. In India, where literacy can be a stumbling block to financial inclusion, voice recognition AI is being explored as a way to help customers complete financial transactions over the phone even when a human customer service representative is not present. And in Africa, Abe AI and Absa Bank are analyzing customer spending to identify opportunities to promote healthy financial behavior (FIBR).
I have long observed that there is a difference between knowing what to do financially, understanding how to do it, and then finally, actually doing it. Building fintech systems that make execution as simple and easy for the customer as clicking a button is the final key to unlocking engagement and financial success for all.
Article By Carla Dearing
Carla Dearing is the CEO of Sum180, a mobile financial wellness service that identifies users’ most relevant Next Steps to strengthen their financial pictureand makes those steps easy to accomplish.
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