According to The Financial Health Network’s annual Pulse research report, 2022 saw the largest shift of healthy respondents moving to the financially coping tier. This data, combined with the trend indicating that people are saving less and spending more, underscores that this downturn has impacted nearly every demographic, no matter a customer’s financial standing. Marginalized communities stand to face measurably worse outcomes as well. Black and Latinx individuals, single-parent households, women, LGBTQIA+ folks, those with disabilities, and those who have faced historic disinvestment or ongoing discrimination are at increased risk of financial adversity. It’s crucial to focus on vulnerable consumers and tailor solutions to their particular pain points. 2. Meet Consumers Where They Are Broadly identifying the trends and financial health of your consumers is an important first step in understanding how to support them. The next step is to assess the specific challenges of each audience and commit to meeting them where they are. Financial institutions often develop consumer-facing tools or support structures without truly understanding their client’s financial literacy or motivations. This leads to time and energy wasted on solutions that aren’t effective or relevant for their intended audiences. Instead, organizations should focus efforts on offering financial education services that are accessible to all – whether that’s online, in person, or through one-to-one consultations. “Providing financial education is critical before you get to a downturn,” says Freda Lee, Senior Vice President, Relationship Management at Corebridge Financial. “Consumers need to be able to have financial plans in place so they can address both expected and unexpected expenses.” Not only should financial institutions provide the tools in an accessible way, but they should also use language that connects their audience instead of alienating them. It’s easy for financial institutions – who live and breathe the importance of financial health – to default to the language they use in their daily work. “But the average consumer doesn’t think about these topics all day, every day”, says Freda. “Consumers need frequent reminders, and in ways they can understand – ways they can identify with as they’re making financial decisions for their households.” Skip the jargon and instead use simple, approachable language and practical reminders that will encourage consumers to build healthy habits. 3. Connect with Consumers in Three Key Ways Since the fallout of the 2008 economic crisis, consumers have expected much more from their financial institutions. Rather than retreating and protecting the bottom line, leaders must step up and support their audiences across the board. This includes employees as well, who will be facing increased challenges in the coming months as this downturn progresses. When communicating with your audiences during difficult times, Co-founder and Managing Partner at Global Leader Group, Richard Knight, recommends following a threestep framework to help individuals feel seen, understood, and supported. 1. Reassure: Acknowledge the struggles of both consumers and employees, and recognize the unique challenges they may be facing due to their background. Offer encouragement that you’ll get through this difficult period together. 2. Educate: The more knowledgeable a customer is, the better for your business. Share how your organization can support them and what’s available to them – either immediately through products and services, or longer-term through education and support. Help them build the muscles of habits like saving and putting money into retirement. WE MAKE IT EASY LET OUR TEAM HELP YOU SECURE THE DEAL AND LOWER YOUR RISK • UP TO 90% OVERALL FINANCING • UP TO 25 YEAR TERM • FIXED-RATE PREFERREDLENDINGPARTNERS.COM | 303.861.4100 Leveraged financing and refinancing of owner occupied real estate and long-term equipment. Most for-profit small businesses eligible. SBA defines businesses with net profit after tax <$5.0 Million and tangible net worth <$15.0 Million as small. January • February 2023 17
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