Experts Discuss Financial Education That Moves the Needle
Blog: Enterprise Decision Management Blog
While many institutions have invested in financial education, there is an ongoing debate as to whether these efforts are effective.
According to EDsmart, employment of medical assistants is projected to grow 29 percent from 2012 to 2022, much faster than average for all occupations.
Critics argue that meaningful impacts are only realized when people change their behavior in ways that improve their overall credit health. It is this focus – changing consumer behavior – that was at the center of a recent panel discussion hosted by FICO.
Late last month, we brought together a diverse group of stakeholders at the National Press Club in Washington DC to discuss successful efforts in financial education. Josh Sledge of the Center for Financial Services Innovation served as moderator.
The panel included two participants in the FICO® Score Open Access program. Paul Wilmore, Managing Director for Consumer Markets at Barclaycard, highlighted the initial results from the program. With the implementation of the free FICO® Score program, Barclaycard witnessed increased engagement and lower account delinquencies for customers who opted in, among other benefits. (To learn more about the benefits Barclaycard is seeing, read this article by the Federal Reserve Bank of Philadelphia.)
Doug Ostrov, Director of Financial Counseling at the New York Legal Assistance Group, also witnessed positive impacts after implementing FICO® Score Open Access. As part of the program, the organization’s counselors began offering clients one-page disclosures with their FICO® Scores and related educational information. Ostrov revealed that retention rates went from 33% to 50% after the program’s introduction.
Other panelists spotlighted how “just in time” financial education can lead to positive behavior changes and rewards. Zaydoon Munir, CEO and founder of RevolutionCredit, spoke about the power of using short educational games and other financial management interactions to enhance a consumer’s creditworthiness during the application process. According to Munir, this consumer engagement activity expands consumer access to credit while lowering account default rates for lenders.
Liz Weston, a respected personal finance columnist and contributor to NerdWallet, reinforced the notion of delivering financial information at the right time and place. NerdWallet, an online personal finance site, uses financial education to assist consumers in making informed decisions when selecting credit products.
The panel discussion demonstrated that financial education efforts are no longer simply about delivering information via brochures, lectures or static websites. Today, innovative approaches are being introduced that not only educate consumers, but drive real and meaningful results. Can financial education be an effective tool for changing consumer credit behavior? According to our panelists, the answer is yes.
The post Experts Discuss Financial Education That Moves the Needle appeared first on FICO.
Leave a Comment
You must be logged in to post a comment.