Table of Contents
Executive Summary
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- Market overview
- Impact of COVID-19 on consumers and financial understanding
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- Figure 1: Short, medium and longer term impact of COVID-19 on Financial services, May 2020
- Key takeaways
- Many consumers are paradoxically optimistic
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- Figure 2: Attitudes toward financial health, by generation, March 2020
- Financial professionals are being challenged by YouTube and the internet
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- Figure 3: Sources of financial information, by generation, March 2020
- The gender gap remains intact
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- Figure 4: Gender differences in financial confidence, March 2020
- What it means/what’s next
Impact of COVID-19 on Consumers and Financial Understanding
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- Figure 5: Short, medium and longer term impact of COVID-19 on Financial services, May 2020
- Opportunities and Threats
- Financial brands can be a voice of clarity during difficult and confusing times
- Inequality Rising
- Moratorium on evictions set to expire in some parts of the country
- Impact of COVID-19 on the financial services industry
- Welcome to the appointment economy
- Direct mail is in critical condition
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- Figure 6: Financial services acquisition mail volume, by sector, January 2019 - April 2020
- Digital offerings provide outlet for much-needed education
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- Figure 7: Citizens Bank COVID-19 resource center, May 2020
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- Figure 8: Transamerica email campaign, April 2020
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- Figure 9: Skimm’Money homepage, April 2020
- How the crisis will affect key consumer segments: an uneven playing field
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- Figure 10: real median household income, by race and Hispanic origin, 1988-2018
- How a COVID-19 recession will reshape the financial services industry
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- Figure 11: Personal Saving Rate, seasonally adjusted, April 2008 – April 2020
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- Figure 12: Unemployment rate, by race and Hispanic origin, May 2007 – May 2020
- The shadow of the last financial crisis still looms, especially for Millennials
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- Figure 13: Attitudes regarding recessions, government, financial industry, by generation, October 2019
- COVID-19: US context
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The Market – What You Need to Know
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- Household debt keeps climbing
- Economic disturbances may lead to social, political unrest
- The financial sector has been dependent on tech during COVID-19
Market Factors
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- Household debt continues to pile up
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- Figure 14: Total US non-housing consumer debt, by type, Q1 2003-Q1 2020
- Politically, financial literacy and understanding has not been a priority
- Economic indicators already foretell the worsening inequality divide
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- Figure 15: Unemployment rate, by race and Hispanic origin, May 2007-May 2020
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- Figure 16: Personal Saving Rate, seasonally adjusted, March 2008-March 2020
- Technological and social drivers will direct the path forward
Key Players – What You Need to Know
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- Financial Literacy Month 2020 did not go as planned
- Understanding is no substitute for means, formal financial education still low
- Could COVID-19 be a test lab for UBI?
What’s Happening
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- Financial Literacy Month triaged behind COVID-19
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- Figure 17: Allstate email campaign, April 2018
- COVID-19 puts the kibosh on (in-person) Chase Chats
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- Figure 18: Chase Chats, Loyalty email, March 2020
- Figure 19: Chase Chats, Facebook announcement, March 2020
- The Skimm wants to be more
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- Figure 20: Skimm’Money homepage, April 2020
What’s Struggling
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- Understanding is no substitute for means
- The gender gap persists (among others)
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- Figure 21: Gender disparity in financial understanding, March 2020
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- Figure 22: Race and ethnic disparities in financial worry, March 2020
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- Figure 23: SoFi, Women in Leadership series, March 2020
- Formal financial education exists, but must be expanded
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- Figure 24: Financial education in school, by generation, March 2020
What to Watch
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- Political and economic theory are approaching a day of reckoning
- The Premise
- Stimulus payments could be proving ground for UBI
- People want expansion of government safety nets
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- Figure 25: Attitudes toward social security, Medicare and UBI, by age, October 2019
- Why should banks and other financial companies care?
The Consumer – What You Need to Know
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- Pre-COVID-19, 85% said they were confident in their financial know-how
- People want to know more about investing and saving for retirement
- Family is the greatest teacher; the internet is edging out the pros
- Many consumers express dissonant financial opinions
Perceived Financial Confidence
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- Overall, people are quite financially confident; men more so than women
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- Figure 26: Self-assessed personal financial confidence, by age and gender, March 2020
- More wealth does not guarantee greater financial confidence
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- Figure 27: Self-assessed personal financial confidence, by household income, March 2020
What Consumers Want To Learn
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- Investing and retirement planning are the largest opportunities
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- Figure 28: Areas of financial knowledge interest, March 2020
- Younger consumers are the most eager to learn
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- Figure 29: Areas of financial knowledge interest, by generation, March 2020
- Multicultural consumers also tend to be more financially curious
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- Figure 30: Areas of financial knowledge interest, by race and Hispanic origin, March 2020
Sources of Information
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- Family is #1, and the internet is edging out the professionals
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- Figure 31: Sources of financial information, ranked, March 2020
- Millennials and Gen Z prefer the wisdom of the internet
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- Figure 32: Sources of financial information, by generation, March 2020
- Women are more likely to look to family; men consider more sources
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- Figure 33: Sources of financial information, by gender, March 2020
Financial Goals
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- Consumers recognize a lot of important financial to-dos
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- Figure 34: Consumer financial goals, March 2020
- Indifference is a large barrier to financial education outreach
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- Figure 35: Importance of various educational resources, by generation, March 2020
Financial Basics
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- Cognitive dissonance is a financial norm
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- Figure 36: Attitudes toward financial health, by generation, March 2020
- Foundational education is still needed
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- Figure 37: Understanding of financial concepts, by generation, March 2020
Appendix – Data Sources and Abbreviations
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- Data sources
- Consumer survey data
- Direct marketing creative
- Abbreviations and terms
- Abbreviations
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