A new conversation and the emergence of transparency trendsExcerpts from a groundbreaking study from the financial services research firm Logica, The Future Of Money, examines consumer attitudes toward work and money, within the context of 2020 and our recovery from Covid-19. Access the full report here.
Creating trust with customers may feel like an elusive pursuit, but it is now more important than ever before as Americans struggle through the lasting financial impact of the pandemic. Americans are looking to financial companies to provide advice and great service, but trust is still in question. How can you keep up with your customer right now, and build long-term trust?
With so many people being impacted by layoffs and work from home, we have seen in our Logica® Future of Money study that Americans are more open about their financial situations than they have been before. Conversations about money are more prevalent and more transparent, and people are crowdsourcing advice on money like they crowdsource advice in other areas of their lives. In fact, top psychologists encourage talking openly about finances as it can break down taboos, help gain perspective, gauge progress against goals and encourage accountability. Financial brands should understand this, and use it as an opportunity to become a trusted resource for these conversations.
Who Americans Trust For Financial Advice
Our Future of Money Study shows that Americans are still most likely to turn to financial advisors (31%) and institutions (25%) for financial advice, but friends and colleagues (21%) are in close third place. Trust of these top three sources has remained steady during COVID-19, while many other institutions, including the government, media and schools have decreased.
According to Wealth Advisor, financial brand traits that garner trust include the quality of products and services, great value, security, customer service and customer treatment. Americans also want a financial company that helps them manage their money actively during this time, and communicates with them in a personalized, empathetic way.
Financial brands need to create a fully integrated, personalized, and relevant experience for customers to help build trust. In order to do this, they must fully understand their customer base and their customers’ shifting needs by gaining deep and effective insights. There are tremendous opportunities to show up for customers with an optimal engaging experience—one that evolves quickly over time. The brands that do this will win the hearts and wallets—and trust—of their customers.
What’s Important Right Now
While you need to dig deep to understand all customer segments, our Logica® Future of Money Study uncovers themes financial brands should keep in mind when looking to establish trust.
- Customers are looking for relevant, empathetic communications that center around them and their current needs. Financial brands need to research those needs, and meet them.
- Banking customers are looking for a fully integrated experience across all their devices, touchpoints and interactions—especially during this time.
- Financial institutions need to operate with transparency, authenticity and simplicity to engage their customers.
The Consumer Money Mindset In The Time Of COVID-19 2020
This unprecedented year has uncovered contrasts between challenges and opportunities in the world as a whole and in the world of money, specifically. We have seen accelerated change and adoption of new behaviors on the financial front due to COVID-19. Americans have experienced unexpected stress in their ability to make money and to manage finances. In the face of all this change, we have also been presented with the opportunity to capture the needs and imaginations of people—and help bring the next evolution of change to the future of money.
Throughout 2020, we have seen in the Logica® Future of Money Study that the importance of how Americans make money has risen. In conjunction with this trend, the importance on how we spend money has decreased. In this latest wave, we see a slight decrease in the focus on the importance of how we make money, but it’s still at an all time high. We have seen the coronavirus have an impact on work—with almost half of people working fewer hours, while the other half are either no longer working, or working more hours.
How We Make Money
Although we found the impact on COVID-19 on work to be slightly down in this latest study wave, some changes to the way we work and make money are here to stay. One major shift is that more people will be working from home in the future, and it is likely employees will continue to look to their employers for more financial benefits during the pandemic—and perhaps beyond. We also see that many are planning to postpone retirement due to the impact of COVID-19.
How We Spend Money
During COVID-19, payments have been deeply impacted. Our ongoing Future of Money study has seen a significant decrease in the use of cash—with debit card, credit card, P2P and installment payment options all on the rise. While these shifts started before the pandemic, consumer adoption has been accelerated. Americans are open to new ways to pay, PayPal usage is at an all-time high, and the youngest generation of adults, Gen Zers, are emerging as leaders in the future of payments.
How We Manage Money
Savings in the United States has shown significant growth during COVID-19, while spending is down. Our Future of Money Study shows that people are now simply spending less in most discretionary categories such as travel, experiences and dining out. And they also have an expectation of being able to pay down debt in the coming year. But those reporting job loss due to the pandemic are also reporting tapping into savings more now—and many Americans report stress about their financial situation.
How We Engage With Financial Brands
Trust in financial advisors, financial institutions, friends and colleagues has remained steady during COVID-19, and Americans are most likely to turn to these sources for advice. Americans are looking for a fully integrated financial brand experience—one that shows them great value, is secure, helps them manage their money and is communicated to them in a personalized, empathetic way. Right now, there are opportunities to show up for customers with a deeply engaging experience and build relationships and loyalty that will last.
Access the full report here.