Financial Brands That Inspire Confidence Will Come Out Ahead

Financial Brands That Inspire Confidence Will Come Out Ahead

A complex economy makes clear communication and financial literacy more important than ever.

ERIK OSTER / YULIANA SAFARI

In this economy?

Let’s start with some good news. There are some signs that people are beginning to feel at least a little more optimistic about the economy, compared to recent months. Consumer confidence increased last month, according to the Consumer Confidence Index for August, reversing a trend of declining confidence each month over the course of the previous quarter. While expectations for both the current economic situation and future economic outlook improved, there’s still reason to be concerned – and, while the stock market shouldn’t be confused with the economy as a whole, declining markets in the U.S. this week could indicate some choppy waters ahead.“The Present Situation Index recorded a gain for the first time since March. The Expectations Index likewise improved from July’s 9-year low, but remains below a reading of 80, suggesting recession risks continue,” Lynn Franco, Senior Director of Economic Indicators at The Conference Board said in a statement. “Concerns about inflation continued their retreat but remained elevated.”Last month, Franco noted the role of concerns about inflation – and rising gas and food prices in particular – which continued to be top of mind for anxious consumers. Since then, some prices have begun to fall, and President Biden signed the landmark Inflation Reduction Act on August 16. Issues around inflation, fuel and food costs, are far from resolved, however. The ongoing Russian invasion of Ukraine, which has impacted supply chains for global staple crops and fuel alike, further complicates the picture – even more so in Europe, where countries are more dependent on Russian gas and oil. How harshly this could impact the global economy as winter approaches remains to be seen. The impact of drought, floods, and other extreme weather events exacerbated by climate change on agriculture in the U.S. and abroad could also contribute to continued volatility in food costs.

Complicated, by design

The only certainty in the past few years has been instability. From plunging investments and fluctuating prices to supply shortages and shipping delays, any future prediction can be upended with the next unexpected twist of the global market.With so much uncertainty around the economy, and mixed signals about what we should expect – including continued alarmist rhetoric in the U.S. from conservative media outlets and politicians seeking to benefit from painting an exaggeratedly bleak economic outlook ahead of a midterm election cycle, and opportunistic Tik Tokers urging you to make your investments now – any sort of financial decision can feel overwhelming.People need help to stay up to date, make sense of confusing economic situations, and make informed decisions, without having to worry about navigating difficult processes. Unfortunately, not enough financial services brands are meeting this challenge.

“Our belief is that a more well-informed customer is actually a better customer.”

Andrea BrimmerChief Marketing and PR Officer for digital financial services company Ally Bank

Financial literacy is more important than ever

Compounding matters, the average consumer – especially in the U.S. – isn’t adequately prepared to understand financial decisions in stable times, let alone the complexities of the current moment. With financial literacy on the decline, it appears the gap between the financially informed and uninformed is only growing wider.“The vast proportion [of people] in this country are financially illiterate. We don’t teach kids at an early age anything about financial literacy. And as a result, people are apathetic towards learning about finance, they’re intimidated and it’s overwhelming,” Andrea Brimmer, Chief Marketing and PR Officer for digital financial services company Ally Bank told FutureVision. (Disclosure: Ally Bank is an R/GA client.)“Our belief is that a more well-informed customer is actually a better customer. We want you to understand finance,” she added. “We believe that we have a responsibility to provide financial services that truly serve. And when you believe in that, then part of that service is helping you understand money, helping you understand how to save, how to grow, and even how to spend.”While this issue is perhaps most pronounced here in the U.S., it’s also not isolated to any one country. Those with access to financial information and advice have a leg up on those who don’t, wherever they are.Additionally, brands have made a series of missteps in managing customer transactions and protecting their data, contributing to widespread mistrust with consumers. 67% of customers don’t believe their bank truly cares about their long-term financial needs. More surprisingly, nearly 40% of people aged 25-34 in a recent U.K. survey said they prefer to store their cash at home rather than a local bank. 42% of all respondents in the survey said they thought banks profited off of “hidden charges.”“[Financial services is] a category that’s largely disliked by its own accord. It has treated customers dishonorably in many regards,” from excessive fees to confusing customers with jargon and unclear language, Brimmer explained.”It’s a category that has never truly placed massive emphasis on customer service,” she added.This fraught relationship is further complicated by the rise of digital banking. Customers now rely on easy access to banking accounts and tools, and can swap providers more easily than ever. They’re keen for easy-to-use financial products and services that save them time and money, from quickly setting up an account online to tools that help them manage their finances, quickly make deposits without visiting a bank, or make payments with the press of a button.Convenience has become the status quo, but it’s not enough when dealing with potentially life-altering decisions. Focusing solely on reducing friction can risk flattening a brand’s experience, lowering the barrier to switch services even further.

Confidence: The antidote to strained relationships

Without a clear idea of how their decisions today will impact them in the near future, people need help to make choices they feel assured in. Financial services companies can step up and help meet this need, by providing much-needed guidance and services which are easy to use – rather than frustrating experiences that only add to their economic anxieties – and stand apart from competitors to build long-lasting relationships with their customers.R/GA’s Brand Relationship Design report found that the interconnected qualities of first impression and ease of use were the primary factors driving satisfaction across all brands in the financial services category. Yet, as a whole, financial services lagged behind all other categories considered in the study in designing products and services which are easy to use. Consumers were around 20% more likely to agree that retail and hospitality brands’ products were easy to use compared to financial services brands.Given the importance of financial transactions, people need these brands to provide services that are easy to use and understand, but too often they are confusing and difficult to navigate. Those that can rise to the occasion can provide their customers with real value, and may find consumers frustrated by their experiences with their current financial services provider are more than willing to switch.
Here are three ways financial services companies can bring the needs and voice of the customer back into brand experiences and help instill a sense of confidence around financial decision-making:•First, use simple language and straightforward services. This practice may seem easy enough, but far too often we still see jargon-filled language in banking communications. Financial services companies need to get out of their own way by ensuring all communications are clear, direct, and digestible. This not only saves time, it enables personal agency, making people feel confident in their financial moves. How many of us fully understand compounding interest? Keeping it simple goes a long way in building financial understanding among consumers, which in turn instills confidence.Take a note from Ally Bank, which has made clear communication, experiences that are easier for people to use, and customer service brand cornerstones. “That’s what the brand has been built on,” Brimmer said, “identifying those pain points, finding a different way to do it, and thinking like humans – not thinking like marketers, and bankers, and technologists – thinking about everything that we didn’t like in the category as customers of the category and how to solve for that.”•Second, learn what their financial goals are from the get-go. Consumers in this category are looking for brands that help them achieve their financial goals so that they feel competent and have a sense of security in the face of an uncertain future. Start with an onboarding experience that asks them what their short and long term goals are, covering everything from saving towards a new home to their retirement plan. Go a step further, and make it easy for them to change this up at any time.•Lastly, create a pathway for them to achieve their financial goals. Now, through rewards, help your customers prioritize and better understand their financial goals, by offering them educational content, alerting them with easily understandable advice when the market fluctuates, and offering them smart tips through intuitive nudges. Track the progress they’re making to help them stay motivated, and help them master financial literacy.”The first instinct in a downturn is to pull investment and pause innovation. But this comes with its own cost,” according to R/GA global chief strategy officer Tom Morton. Faced with high prices and shortages due to supply chain issues, shoppers are breaking habits to find new ways to get what they need. The financial brands that inspire confidence will win over consumers long after we’ve moved onto the next economic cycle.

COMMENTS

WORDPRESS: 0
DISQUS: 0