According to the Consumer Financial Protection Bureau, financial wellbeing is defined as “a state of being wherein you have control over day-to-day, month-to-month finances; have the capacity to absorb a financial shock; are on track to meet your financial goals; and have the financial freedom to make the choices that allow you to enjoy life.”
Financial wellbeing isn’t just about crunching numbers. It’s about feeling secure and in control of everyday finances.
Customers that are financially secure will have enough cash to settle bills on time and a game plan for unexpected expenses. It’s not just about helping customers to survive financially; it’s about providing them with the tools and knowledge to shape their future in line with their goals.
How can banks help customers to improve their financial wellbeing?
Budgeting tools – Budgeting tools empower customers by providing a clear overview of their finances. This enables them to identify any unexpected expenses and areas where they can cut back.
Financial literacy tools and tips – Financial literacy tips provide customers with the knowledge to make informed financial decisions and proactively plan for the future.
Savings goals – Simple to implement and manage, savings goals can help customers to hit their targets. They can also create an emergency fund for future financial difficulties that may arise.
Predictive spending insights – Providing customers with predictive insights into future spending and budget trends can empower them to make better financial decisions and prepare for the future.
By helping customers to prioritise their financial wellbeing, banks can increase the loyalty and retention of customers, reduce loan defaults and increase cross-selling opportunities. For customers, it provides the confidence to handle day-to-day financial decisions, allowing them to fully engage in your life, work, and society at large.