LOMBARD, Ill.—Consumers, particularly Millennials, see a great deal of value in financial literacy programs, according to a new study that also indicates the programs build loyalty.
Raddon Financial Group recently asked consumers to share the perceived value of a financial literacy program hosted by their primary financial institution. Over a quarter of respondents said such a program would be “extremely or very valuable.”
“The value of a financial education or literacy program resonates even more strongly with Gen Y; 4 out of 10 Gen Y respondents said such a service would be “extremely or very valuable,” said Research Analyst Lynne Cornelison.
A third of respondents who identified their primary financial institution as a major bank also said a financial literacy program would be “extremely or very valuable.”
“This may be one reason Bank of America partnered with Kahn Academy to provide financial education to its current and potential customers,” Cornelison. “Can financial literacy provide an opportunity to differentiate?”
Raddon found those who place significant value on a financial literacy or educational program tend to exhibit a higher degree of loyalty to their institution. More than 40% of those who said a financial literacy program would be “extremely or very valuable” also said they would bring more business to their primary financial institution. Among all respondents, only 14% responded that a financial literacy program would prompt them to bring more business to their primary institution.
“Today’s consumer, regardless of generation, is using a broader range of financial products, delivery channels and disruptors,” said Cornelison. “Opportunities to engage with the consumer become more crucial in an environment that is becoming more virtual because of technology. Any means by which a financial institution can interact with consumers and decommoditize its products adds value to the organization. Financial literacy and education programs appear to be one way to differentiate.”