Jack Henry & Associates: Supporting Communities with Personal Financial Management Tools

Financial wellness is a journey of a lifetime with many twists and turns and no clear destination. In August 2020, more than two-thirds of Americans (roughly 167 million people) were not in good financial health. Disparities in financial health have widened by race and have persisted between the sexes over the past year. These people find it difficult to spend, save, borrow, or plan in a way that allows them to be resilient and seize opportunities over time. Even people who appear to be successful may feel financially insecure and unable to manage their long-term financial goals, like retirement or paying off debt.

Many community banks and credit unions include statements of financial well-being in their mission or value statements. Things like “Help clients achieve financial independence,” Where “Facilitate the financial security of its members, associates and their families“, are frequently seen on the boardroom wall. But how many of these institutions strive to provide their account holders with a full 360-degree view of their financial situation across all of their relationships? service?

With this 360 degree view, there is a way for consumers to have a holistic and objective measure of their financial health. and concrete actions that would make a difference in reaching their short and long term financial goals. This is a huge opportunity for banks and credit unions in the United States, and this is where a comprehensive personal financial management (PFM) system comes into play.

The challenge facing many community financial institutions is the adoption of PFM. They may wonder how many people will actually use these tools if offered to them. Research shows that account holders are increasingly looking for these tools. The truth is that many Americans do not feel supported by their institution. When asked if their bank or credit union is helping them become financially strong, 50% of respondents to a 2021 survey said, “No, they’re not really helping. Another 4% responded that they thought their establishment made matters worse. Customers and members will use these tools if delivered in the right way. The job of the financial institution is to raise awareness and provide support so that using these tools becomes second nature and their account holders have the information they need to start taking action for financial health.

Three key elements in adopting the personal finance tool

The key to increasing adoption of personal money management tools is supporting clients and members every step of the way. Never assume that something is obvious, as many of your account holders may not be familiar with these tools. In fact, the journey begins simply with awareness.

1. Educate and empower
   Clients and members may feel uncomfortable with personal financial management tools at first. Leverage your existing channels (social media, email, app, website) to repeatedly expose them to features and functions so that they become curious enough to try it out. It is important that all marketing materials include the diversity of age, gender and race. Some customers may think that these tools are not “for them”, and not seeing yourself represented in marketing will only reinforce this belief. Make it easy for any account holder to contact an employee to help them understand how the tools work.
2. Get on board efficiently
   Integration is not universal. Give account holders options as to how they are integrated, whether that’s exploring the platform themselves and asking for help when needed, or an individual tutorial. They may also have reservations about the safety and security of their financial data, so making sure they understand how their data will be used and who will have access to it during onboarding is critical.
3. Support
   The best way to support users is to provide them with a simple and intuitive platform while making it easy to get help from a real person. Make it easy for them to turn features on and off on their own and make sure there is feedback when actions are taken (i.e. confirming a change has been made with a window contextual). Don’t forget to celebrate achievements and milestones!

With the right PFM tools, many Americans will understand how to use money as a way to improve their lives. Banks and credit unions can make a real difference in the community by providing these tools. By allowing everyone in the community to take control of their finances, financial institutions can directly encourage growth and equality.