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Building a nation of savers will keep more money in our economy, make responsible credit more accessible and improve resiliency when setbacks occur.
April 29 -
Providers should link their products and services to information and tools that are relevant, timely, actionable and ongoing.
April 30 -
Why does an industry so often criticized for charging high fees to low-income consumers think it can win over critics by adding members of the 1% to the payroll?
November 30 -
Several tech startups have made short-term credit the focus of their business models. But could a product so universally frowned upon ever achieve mainstream acceptance?
January 30
Much as I've enjoyed the lively discussion about financial literacy jumpstarted by a couple recent BankThink posts, I suggest we abandon the notion that banks are morally obligated to educate their customers.
A beautiful sentiment, but it's too easy to counter with the argument that individuals should be responsible for their own money management.
It's even easier to point out that consumers might be reluctant to take advice from banks, given the role the industry played in the financial crisis.
Financial literacy initiatives should be still be pursued, though. Cece Stewart and Bob Annibale of Citigroup rightly point out that "building a
Additionally, the economic downturn forced lots of folks to pay closer attention to their finances.
To put it bluntly: Ditch the
Instead, concentrate efforts and resources on developing products and offering services that will help consumers meet a specific financial goal. Partner with nonprofits to build awareness of these products as a means of promoting them and distributing valuable advice.
Jennifer Tescher and Joshua Sledge highlight
There are also some existing products that illustrate how banks can use financial literacy to add value. Capital One's Journey Students Rewards Card, as one example, rewards cardholders for making payments on time and provides access to a monthly credit score. The card has been rated highly by
Also, several tech startups have seamlessly integrated financial literacy into their business models. Moven, for instance, touts money management and financial wellness as a key component of its alternative checking account.
These and similar efforts trump organized financial literacy rallying cries because they benefit all parties involved. Consumers get sound advice and a product that can directly help improve their finances. Banks, meanwhile, have another angle to work as they try to stay competitive with the likes of Moven. Public trust gets rebuilt organically.
Otherwise, by flying the financial literacy flag too high, banks risk creating this industry's equivalent of
Jeanine Skowronski is the deputy editor of BankThink. You can contact her at