I got my first job when I was 16 — a pool cleaner. I was earning a paycheck for the first time, and my mom immediately took me to the bank and made me open an account. It was at this time I also got my first credit card at Mervyn’s. My mom said, “You need to start saving and building your credit.” This was the early 1980s; she was well ahead of her time with this important advice.
Fast forward to today: 2020 is a year that has disrupted our economic and social realities while spotlighting the power of the consumer. We saw restaurants shuttering, airlines reducing flights, retail stores closing, and the gig economy challenged. We experienced civil unrest and protests of social injustice.
These challenges put a big spotlight on the country’s financial literacy woes. And it brought to light a larger, more prevailing issue: We, as a society, can do more to teach financial literacy as a fundamental life tool.
According to an August 2020 Charles Schwab Financial Literacy Survey conducted by The Harris Poll, most Americans (89 percent) think that the lack of financial education contributes to bigger societal concerns, including poverty, lack of job opportunities and unemployment. This underscores a societal challenge and an opportunity for those of us in the financial services industry.
There is good news, however. Throughout the pandemic at Experian, we have seen demonstrable increases in consumer interest in financial literacy. For example:
- Our weekly online credit education sessions have seen a 70 percent increase in social media engagement as we discussed ways COVID-19 was impacting our economy, personal income and unemployment.
- We saw a 66 percent uptick in consumers accessing their credit reports.
- The number of consumers applying to potentially increase their credit score doubled from March to August.
In addition, we have seen an almost 55 percent increase in media coverage on the topics of “personal finance” and “credit” from Summer 2019 to Summer 2020.
These statistics show a growing appetite for financial literacy. The financial services industry can’t solve society’s economic problems alone. What we can do is take a hard look at the purpose of our respective companies and ask ourselves, what role can we play to improve financial health? The need and the opportunity are there.
For most financial services companies, I’m confident we can use our expertise and products to help consumers navigate and optimize their financial health. But how do we take it further?
We can’t just offer a webpage of information. A pamphlet of sources. The best, most effective way is to engage. We know first-hand that building a community of everyday, ordinary consumers along with experts keep the conversation around financial health strong. Community and social engagement make it real, credible and approachable — while consumers remain engaged in the topic, even when we pull away from the pandemic.
This gets back to purpose. During these unpredictable times, we cannot stray from our purpose, our mission and our values. As an industry, we must remain steadfast in our quest to help consumers in their financial journey.
Keep this in mind: The pandemic is merely a moment in history, but one that has driven a movement by and for consumers. And as we pass the moment, keep respecting the movement … and help keep the appetite up for financial literacy. Society will be better because of it.
Gerry Tschopp is Chief Communications Officer, North America, and heads global external communications at Experian, the world’s leading information services firm. He is a member of the USC Annenberg Center for PR Board of Advisor