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What the Financial Health Network and J.D. Power Know: Data Can Guide the Way for Financial Institutions to Improve Financial Health for Customers

Financial solutions aren’t one-size-fits-all. To solve finhealth challenges, it’s important to have a deeper understanding of customers’ financial health needs.

Thursday, December 2, 2021
 What the Financial Health Network and J.D. Power Know: Data Can Guide the Way for Financial Institutions to Improve Financial Health for Customers

The recently released Financial Health Pulse™ 2021 U.S. Trends Report shows that, while overall financial health improved over the last year with gains from historically underserved populations, 187 million people – two-thirds of Americans – are not Financially Healthy. 

Plus, consumers may face additional challenges, according to the U.S. Polaris survey, a monthly report included in the J.D. Power Financial Health and Advice Program in collaboration with the Financial Health Network. This report, which looks at the financial health of banked consumers, found that consumer financial health has been declining in recent months. However, this decline should not be surprising, given that in September, pandemic-related unemployment benefits ended for an estimated 7.5 million people. According to the U.S. Polaris survey, consumers are struggling to pay their bills on time, paying more banking fees, maxing out their credit cards, and postponing medical and other spending. 

Consumers want and need their financial institutions to better support their financial needs. According to 2021 Financial Health Pulse data, 75% of customers expected their primary financial institutions to help them improve their financial health. When customers believe their bank cares about their financial health, they tend to repay their bank with greater loyalty, willingness to refer friends, and openness to additional banking products. With U.S. banks expected to achieve “record level” earnings in 2021, now is the time to invest in improving consumer financial health, especially since this investment is good for both the consumer and the bank.  

The question of how to invest – the tactics to implement and the solutions to deploy – is a quandary that awaits an answer from every financial institution leader. The Financial Health Network has always believed that data and financial health metrics are the building blocks of impact, which is why we created the FinHealth Score® Toolkit, a resource for surveying and analyzing financial health, and Attune, a measurement and insights platform. We know that what gets measured gets managed, so the Financial Health Network is continuously ideating and exploring ways to support organizations on this journey. 

A FinHealth Collaboration With J.D. Power

The Financial Health Network launched a collaboration with J.D. Power to provide banks with data on the tools and channels that customers are seeking for financial health support. In this collaboration, the J.D. Power Financial Health and Advice Program – which includes an annual study and  Polaris monthly reports – leveraged the Financial Health Network’s 17 years of experience and FinHealth Score® methodology to offer deep, real-time insights into the products, tools, and communications that consumers want and need to support finhealth. According to J.D. Power’s September 2021 Polaris report, consumers need help managing debt and setting budgets. While many banks and credit unions offer budgeting tools on their websites, the July Polaris report noted that 50% of consumers are unaware of or unsure how to use budgeting services – with just under 20% saying they tried unsuccessfully to use them. This is an example of one meaningful way that financial institutions can invest in financial health. 

Understanding Customer Financial Health Needs

There is not a one-size-fits-all answer to these finhealth challenges, as evidenced by the many and varied fintech solutions on the market. For example, personal finance app PocketGuard focuses on consumers who are struggling to spend within their means, offering features such as “IN MY POCKET,” which tells users how much spendable money they have left. Another app, You Need a Budget (YNAB), targets consumers who are serious about building savings and getting out of debt by creating a plan that accounts for every dollar. In contrast, Regions Bank personalizes financial planning with Regions Greenprint, a system that connects customers with a banker to measure their financial health and then create, track, and meet their financial goals. 

To determine how to best help their customers, institutions must first understand their customers’ deep financial health needs. That’s why the Financial Health Network uses financial health data to help companies assess their product gaps and opportunities. Consumers need financial institutions to deliver solutions that will help them build resilience and pursue opportunities, and financial health data can provide a clear call to action for financial institutions seeking to support their customers’ financial health. 

To learn more about delivering critical solutions to improve financial health using the Financial Health Network’s tools, like Attune, and to learn more about the J.D. Power Financial Health and Advice Program, please contact Marisa Walster at mwalster@finhealthnetwork.org.

Written by

  • Marisa Walster
    Vice President, Financial Services Solutions
    Financial Health Network