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Embracing Personalized Credit Education for Financial Inclusion Success

Today’s financial services marketplace is changing more quickly than perhaps any other time. Technological changes are shaping consumer attitudes on how financial products and services are delivered — and financial institutions’ abilities to meet those evolving needs and expectations are critical to ensuring their long-term viability.  

Successful banks and credit unions understand adapting to shifting sentiments is central to turning the digital lending experiences they offer into powerful ROI engines that generate new opportunities.

Credit literacy programs open the door for financial inclusion

These days, consumers have much more access to their credit information and, therefore, better understand the impacts credit has on the choices and financial opportunities available to them. As a result, they increasingly monitor their credit scores and reports. That trend was confirmed in the most recent credit monitoring study from TransUnion: More than half (58%) of US consumers reported they check their credit reports at least once a month, while nearly a quarter (22%) do so on a weekly basis. The survey also found 86% of consumers agree monitoring their credit report is moderately to extremely important.

Increased availability of their credit information is appreciated, with 59% of respondents reporting they have sufficient access to credit and lending products. For financial institutions, the remaining group that feels underserved presents a tremendous opportunity to address their concerns and earn their business.

Personalized financial education tools enhance the digital experience

Given their near-constant connection to online tools and resources in the rest of their lives, today’s consumers expect the digital experiences delivered by their chosen vendors to provide easy access and intuitive interfaces. And since any perceived shortcoming or performance issue may drive consumers to a competitor, delivering well-designed, instinctive experiences online is vital.

Consumers have also become accustomed to online experiences being more personalized, which puts additional pressure on lenders. After all, if a consumer’s favorite online retailer can provide customized deals, and a preferred streaming service can recommend shows they’ll like, why shouldn’t their financial institution present tailored financial products and services?

Personalization is particularly important when it comes to financial well-being. No two consumers share the same financial and credit history. Their needs are unique, so they’re looking for guidance appropriate for their distinct situations. Providing personalized insights not only helps consumers develop effective strategies for the future, it also creates more engaging digital experiences that encourage greater trust in and loyalty to the organization.

Why financial inclusion builds long-term success for lenders

Actively nurturing the creditworthiness of consumers also enables lenders to expand their customer bases. As a consumer’s credit and financial footing improves, they become eligible for more advanced products and services. By helping them along their financial journey, the financial institution earns trust — and is well-positioned to present appropriate products and services when the consumer is open and ready for such offers.

Delivering quality, personalized digital experiences to all consumers — wherever they are on their financial journeys — can create stronger relationships and more opportunities for long-term success.

Implementing a digital experience that enables an organization to compete effectively requires a clearly defined strategy. Based on TransUnion’s research, there are tactics financial institutions would be advised to consider. For example:

  • Give consumers the ability to monitor their credit reports, equipping them to detect problems and correct inaccuracies that can hurt their credit scores
  • Engage customers with educational content, personalized insights and interactive tools to keep them coming back to the organization’s app or website — which can foster deeper relationships
  • Work with consumers to improve their creditworthiness, rather than simply targeting prime and super prime candidates, creating a customer base that’s more loyal and open to offers when they’re eligible

In today’s digital world, consumers expect more from the companies they choose to do business with. Those expectations (combined with the ability to easily change vendors) often present challenges for financial institutions. Yet, those same expectations can generate profitable opportunities when understood and addressed with a well-developed digital strategy.

By delivering easy access to credit information, personalized insights and digital environments that empower consumers, financial institutions can cultivate a loyal base of creditworthy customers — and promote sustainable growth for the future.

For more insights, watch our on-demand webinar, Nurturing Creditworthy Consumers.

Do you have questions? Our team is ready to help.