This week, the Office of the Comptroller of the Currency (OCC) asked U.S. financial institutions (FIs) for their help in “improving the financial capability and financial health of their customers.”
In a statement issued on Tuesday (April 2), the OCC said it believes the best way FIs can do this is by delivering “high-quality financial literacy education” to consumers, especially those who are now “underserved” by the industry.
The request was issued in conjunction with the start of National Financial Capability Month, which begins in April. But as PYMNTS Intelligence data shows, consumers are looking for trustworthy financial advice from their FIs throughout the year.
In fact, “looking for advice” is putting it mildly. According to PYMNTS Intelligence’s “How CUs Can Help Younger Consumers in a Distressed Economy,” 59% of FI customers expect their financial institutions to help them improve their financial health.
The report, which was completed in collaboration with PSCU, found that the need for financial advice is especially acute among younger consumers. Twenty-nine percent of Generation Z consumers surveyed admit they did not know their own credit scores. This may not be surprising, considering that 79% of Gen Z and millennials say they get their financial advice through social media. Only 11% say they use financial advisers to get the direction they need.
Another PYMNTS Intelligence Tracker, “Personalization Beyond Traditional Banking to Build Financial Wealth,” found similar patterns in the United Kingdom.
The Tracker found that a growing number of young adults in the U.K turn to TikTok influencers for their budgeting and personal financial advice. Fifty-eight percent of Gen Z consumers in the U.K. say they follow TikTok “fin-fluencers” and 26% of them believe their social media gurus offer better advice than the professional financial providers they consult.
When it comes to dispensing advice specific to the topics of saving money, investing or even picking a mortgage, 46% of U.K.-based Gen Z respondents say they find TikTok influencers helpful, while 1 in 3 say their influencers have even alerted them to offers that inspired them to consider switching FIs.
“Personalization Beyond Traditional Banking to Build Financial Wealth,” which was created in collaboration with NCR, also identified the financial educational resources U.S. consumers are seeking.
Included on their wish lists are tools that can help save for retirement, build emergency savings accounts, and better manage debt. Getting personalized advice about funding and managing 401(k) accounts was an especially popular request for U.S consumers. Eighty-three percent of Gen Z respondents and 82% of millennials say they would appreciate such guidance, as would 79% of Gen X respondents and 67% of baby boomers.
National Financial Capability Month is as good a time as any for FIs to deliver on the OCC’s request by helping their customers broaden their financial education. But, as findings from the two PYMNTS Intelligence reports mentioned in this article make clear, consumers — especially younger ones — seem to be in serious need of authoritative, reliable and credible advice about credit scores, budgeting, saving, investing and more.
Delivering on this need may serve as something of a public service, and this concern makes sense, given that the OCC is a governmental organization. Perhaps more importantly for FIs, offering this kind of financial literacy education would mark a valuable opportunity to deepen existing customer relationships while drawing in new customers seeking guidance.
Failing to do so would not only be a missed opportunity for FIs, but for consumers, who would likely turn back to the self-professed financial “experts” that crowd social media platforms.