The keystone of trust: How financial education creates loyalty
In an era of economic volatility and uncertainty, being well-informed and educated in managing personal finances is critical to long-term success. Still, it is seldom prioritized in our school system’s curriculum, and many Americans lack the financial know-how needed to make sound decisions about investing, borrowing, and saving their money.
In fact, financial illiteracy is so widespread that in 2023, over 60% of American adults surveyed claimed to have lost over $500 due to a lack of knowledge about personal finances. Nearly 9% of those respondents said they had lost more than $10,000 in a year due to a lack of financial literacy. In fact, financial literacy is getting worse and is currently at its lowest point since 2023.
For credit unions, teaching people about money is more than just keeping them informed about how much they have in their accounts. It’s about arming them with the knowledge to make smart choices to secure a better future. When credit unions show the outcomes of financial literacy, like financial freedom, they can help lead people down a path of lifelong financial learning.
Credit unions have an opportunity and obligation to take a leadership position in educating their members about managing and improving their finances while avoiding potential pitfalls. In doing so, they can build trust and more enduring bonds with members while uplifting the communities in which they operate.
Financial education builds trust
Financial education is incredibly important for the relationship credit unions build with their members and wider community. It helps create trust and loyalty between them. When credit unions provide effective education about money matters, it shows they care about their members’ long-term financial success and overall wellbeing. They can offer helpful resources and programs that teach members about budgeting, saving, and investing. This education not only helps members make smart money decisions but also makes them feel connected to their credit union.
Many people who lack financial literacy can feel intimidated by finances, including understanding complex industry jargon and making monetary decisions. Through education, financial confidence can grow, and with it the courage to make financial choices that can benefit a person’s family and future. Imagine if your credit union could take some of the credit for that transformation — and how grateful your members will feel for their newfound financial freedom.
Credit unions that do a great job teaching their members and community about money have an edge, especially when competing with large banks or fintechs. Members stick around because they see their credit union as a reliable guide for getting better with money. This is another way in which financial education promotes member loyalty and member retention.
The trust that comes from financial education goes beyond just learning about money. Members feel more comfortable trying out new products or services that the credit union suggests because they trust that the credit union is looking out for their financial well-being. It’s like having a friend to help make good money choices. When credit unions make learning about money interesting and easy, it builds a strong bond with members, making them feel supported on their journey to financial success.
The urgency has never been greater for credit unions to become leaders in financial education. When your members win, you win. It’s time to deliver financial empowerment—to build trust, create loyalty, and form a community of informed, proactive members ready to face the financial challenges of today and tomorrow.
The road to establishing trust through financial literacy is clear—it’s now up to you to take the lead. To learn more about how to easily integrate impactful financial education into your products or services, request a demo with the experts at Zogo.
