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The Impact of Financial Intelligence on Consumer Trends in Financial Services
Datamonitor, Jan 2011, Pages: 86
Introduction
High levels of household debt and reduced levels of household savings left many consumers unprepared and vulnerable when the global economic crisis hit. FS providers have a role to play in increasing financial intelligence and making consumers responsible for their own debt. Increasing engagement with the industry and financial products will help to address low financial intelligence.
Features and benefits
- Encourage consumers to address their finances by engaging them with the FS industry.
- Learn why consumers do not always act rationally through understanding innate, cognitive biases.
- Demonstrate empathy with consumers' debt problems through relevant advice and tools.
Highlights
- Product holding increases with both financial intelligence and engagement. Consumers who avoid their finances are also avoiding saving and have a lower holding of a number of insurance products.
- Older consumers are more financially intelligent highlighting the importance of experience with the FS industry and its products. Providers can increase financial intelligence among younger consumers by bringing this experience to them earlier.
- Consumers are not always rational in their decision making processes. FS providers must understand this and use innate cognitive biases to their advantage when positioning their products and services.
Your key questions answered
- Why has consumer debt reached such high levels while savings have dropped?
- Why do consumers often fail to make rational decisions about their finances?
- How can FS providers help consumers to face up to their debt?
- Can financial intelligence be taught, or does it simply come down to experience?
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