The financial services industry has made major strides in amping up its overall customer experience game; however, there is still a deficit in the personalization and accessibility of products and services for many Americans. The financial services industry must consider its customer experience game while also grappling with a sense of distrust from many communities due to systematic barriers, maintaining utmost accessibility due to the essentiality of the business, and the lack of financial literacy across the country.
With these circumstances of the financial services industry in mind, I’ve outlined three ways financial institutions can work toward more inclusive servicing and step up for underserved communities.
1. Trust and Transparency
A sense of trust toward an institution, like a sense of trust toward a person, is earned. It is imperative for financial institutions to train their employees comprehensively and supply them with the necessary tools to advise and support clients ethically and transparently.
For instance, institutions can help employees foster a sense of trust by being forthright with the terms and agreements of contracts; clients should not have to “read the fine print” marked with astricts and written in tiny font at the bottom of a page to know exactly what they are agreeing to and signing up for, and they should be told what data is being collected from them and how it will be used. Institutions must also prioritize regulatory compliance and be vigilant about carrying out consequences when their employees breach these expectations.
Building trust is not limited to overarching company leadership. Trust is built by every employee at every level truly practicing an empathetic approach that allows for consideration of each client’s unique circumstances and experiences as an individual. It is established through offering personalization without judgment. John Doe may come to a financial institution seeking guidance on how to live off his social security money, while Jane Doe may need assistance on how to best invest the substantial amount of money she recently inherited – each customer should be treated with the same amount of care and thought.
2. Accessibility
There are many lenses through which to consider promoting accessibility, such as location and physical accessibility, financial accessibility, data accessibility, and language accessibility.
The COVID-19 pandemic brought an onset of physical branch closures in all communities, and many communities – especially predominantly African American, Latino, and working-class and rural white communities – already lacked access to physical bank locations. Financial institutions can help combat these “bank branch deserts” by investing in more customizable mobile banking platforms that include easy-to-reach customer support representatives and AI-powered chatbots that are sophisticated and multilingual.
Greenwood, a digital mobile banking platform made for Black and Latino customers, is one example of a financial institution working to increase accessibility among underserved communities. Mike Randall, a co-founder of Greenwood, wanted to address the specific issue of bank branches being replaced by check cashing places that charge absurdly high-interest rates. Greenwood operates completely online, but they partner with FDIC-insured banks and are part of a global ATM network that allows members to use more than 100,000 ATMs fee-free when they need to withdraw and deposit physical cash and checks.
To offer another example of a bank consciously aimed at supporting the underserved, Forbes just recognized Quontic as the number one “best overall online bank.” Quontic calls itself an “adoptive digital bank” and is a certified Community Development Financial Institution (CDFI), meaning it directs at least 60% of its financing to economically distressed communities. It is an entirely online bank but has customer service representatives who members can call and email when they need or want to talk to a human. Like Greenwood, it is part of an ATM network that allows members to use more than 90,000 ATMs fee-free when they need to withdraw and deposit physical cash and checks.
Although there is still indisputable value in physical branches, these uber-successful online-only models show the essentiality for banks, even with physical locations, to prioritize their digital platforms.
3. Education and Advocacy
There are many ways in which institutions can work to execute widespread education and advocacy, such as through data and research, and community involvement.
Investing in more widespread research can help gain insight into traditionally underserved and overlooked communities. For example, traditional financing is very much based on FICO scores, but not all people are a scorable population; thus, their data is typically not considered when businesses perform customer research. Financial institutions can support research internally or by partnering with research firms, using research findings to better advocate for their customers.
Regarding education and advocacy via community involvement, financial institutions can support financial literacy by backing legislation that promotes financial education (only 14 states currently require students to take a personal finance class to graduate high school), by hosting community events like personal finance workshops and seminars, and by driving marketing initiatives that include informative content creation for the general public. Promoting financial wellness and literacy helps everyone; communities with financially sound citizens circulate more money, which helps financial institutions’ profits.
Community involvement extends to charitable donations, as well. For example, Citizens Bank gave over $2 million in grants to small businesses affected by the COVID-19 pandemic to help keep local communities afloat. Wells Fargo collaborates with its Wells Fargo Foundation, which has a grant program that offers grants to businesses and nonprofits working to support financial health, housing affordability, small business growth, and sustainability and environmental justice.
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