Customer financial education needs to become a higher priority for banks
Banks need to start realising that financial education for their customers is as essential to the bank as it is to the customer.
Having only recently entered the vast and mystifying world of finance a few months ago, it took time for me to really begin to understand how much there was to know. Looking back to BF (Before Finance), I have realised how little I really knew about banking, payments and finance in general.
BF, I barely knew what my bank was called, let alone what products it offered, how it was run and the kind of future it is looking towards. Now, I can’t walk into a branch without examining the way the branch is changing or wondering how developed their mobile applications are in comparison to other banks.
Of course, I’m not alone in this. The majority of the public isn’t really aware of the behind the scenes trends and drivers that are shaping what is in fact a very important part of their world.
And how can they be? Unless you are financially savvy, it can all be very confusing: the constant acronyms (I’m still not 100% sure what The Internet of Things is), the statistics and the multitude of products and services, one of which is suggested to you and when you try to understand what it’s really about, you’re told to put your faith in the bank clerk and sign away.
Don’t get me wrong, we have people who are professionals in this line of work for a reason and they are there to help us. But perhaps, the banking world needs to reprioritise and put financial education for its customers higher up its list.
It’s not only in the customers interests. If the customer understands the product and the processes surrounding their bank, they may be able to give the bank a clearer indication of what they need and in return the bank can provide a more tailored product for the customer’s needs. Happy, enlightened customer equals happy bank.
And it’s not only products that customers need to be educated about. As customers, they are stakeholders in the business and as such, they have a right to know how and why their bank is moving in a particular direction.
They need to understand how their data is being used, why banks are looking for new styles of branches, about key factors that might impact the future of the banks such as blockchain and online and mobile banking. It might not always be relevant to their particular situation but it’s important to understand.
Furthermore, banks are constantly going on about how they want to be more personal with their customers. It’s a two street with this: if a bank is allowed to get to know a customer, what they are about and where they are going, then the customer should have as much right to understand the same about their bank, and their bank should ensure this.
Not only does this create mutual understanding, but it allows for a closer relationship meaning a customer is less likely to switch bank.
As is usual with bloggers, I won’t go so far as to suggest how they perfect customer financial education, whether its classes or just tips that you receive every time you interact with your bank. But what is important to highlight is that banks need to start realising the potential and importance of an enlightened customer (unless the banks have a shady ulterior motive which, according to the cynics, they do).
Of course, we as the customer have a part to play, and it is a choice on our part. So perhaps with a bit of transparency and encouragement from the banks, alongside some innovative methods, we might actually understand what a basis point is.