We’ve seen numerous references to the percentage of people living paycheck-to-paycheck. However, the most stunning recent research indicates that 23.7 percent of those making more than $250,000 in salary a year also consider themselves living paycheck-to-paycheck (Source: PYMNTS.com and LendingClub). There is a 50/50 chance that this group of people will know how to get or keep themselves out of financial debt.
A study by the TIAA Institute reported that about 50% of U.S. adults could only answer financial literacy questions in 2022. Something needs to be done to offset this crisis. Financial guidance in the banking and fintech industries is a critical part of your business and is needed now more than ever. Soon college-aged kids will be graduating and looking to buy homes. Statistics show that most public college students aren’t aware of the financial literacy programs offered in their schools. Students may have missed financial education at college, but your organization can step in to educate this market as they learn how to make adult decisions.
Personally, I like to find hope in seemingly hopeless situations. One needs to have eyes and ears to find the good during times like these, or an opportunity is lost. For example, there are currently people who don’t have access to traditional credit and may not fall so neatly in conventional credit scoring (regardless of the salary range). However, an opportunity exists to reach this market with the technology that’s available and that financial institutions can provide.
One of the biggest demographics in need of financial access are Black and Hispanic Americans. A recent article stated, “Black and Hispanic Americans are more unbanked than White Americans, with respective figures of 16%,14%, and 3%.” Isn’t it time to do something? Financial institutions and fintechs have the chance to reach these markets right now with technology, intelligence and partnerships to bring financial wellness to consumers, while demonstrating financial inclusivity for their business. Since traditional FICO credit scoring was not created for “thin file” or “no file” consumers, fintechs can offer solutions with artificial intelligence, alternative data and automation.
Keeping in mind, understandably, the critical ability to decrease credit risk. However, you can decrease this risk while also expanding your lending portfolio when you utilize products that solve credit decisioning problems and reach a broader audience. Financial inclusion isn’t only for community banks and credit unions. The Community Development Financial Institution (CDFI) Fund helps meet these consumer needs. The CDFI is an organization that provides certification for “specialized organizations that provide financial services in low-income communities and to people who lack access to financing.” With this program, financial institutions have resources available.
You can have the right resources for the right opportunities and the right market, but if you don’t have a solid PR/marketing plan in place, your best efforts will fail. Whether you’re a financial institution or have a fintech business, a PR/marketing plan will help you reach and educate your target markets with the proper messages at the perfect time. You’ll need a brand messaging strategy about your business or value proposition that highlights the current trends in the market and how your product and purpose help to solve those problems. This will build your influence and expand your reach.
Educating your audience about financial wellness with a voice that resonates with them will go much further. Content marketing, media outreach, thought leadership and SEO marketing are all ways that can build your credibility in your space. To learn more about how you can expand your reach with a message that truly matters, contact our team.