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Interview: Driving financial literacy programs for underserved communities

Increasing financial inclusion is reliant on a number of factors—financial education.

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Image: © AFP Roberto Pfeil
Image: © AFP Roberto Pfeil

To promote wellbeing and to drive financial inclusion, economic literacy is key. This is especially important in less affluent areas. One area of focus is with improving financial literacy and bringing financial education programs into underserved communities.

To understand the dynamics of putting together and executing such a program, Digital Journal spoke with Rod Griffin, Senior Director of Consumer Education and Advocacy at Experian and Ted Daniels, Founder & President of the Society for Financial Education and Professional Development (SFE&PD).

Digital Journal: Why is financial literacy so important among underserved communities?

Rod Griffin: The credit and financial systems are very complex, even when you work in the field. Now, imagine embarking on your credit and financial journey without any idea where to start. Understanding financial concepts and how to navigate the financial system breaks down the first barrier to financial inclusion and greater financial well-being. Financial education plays a significant role in driving more equitable access to fair and affordable credit.

Ted Daniels: Financial literacy and education are essential for everyone. The less financial knowledge you have, the less efficient you are in managing your financial resources. Everyone has some form of financial resources, just at varying levels. Financial knowledge helps you maximize the resources you do have. And with so many people from underserved communities starting the race from further behind, understanding how to navigate the financial system and properly managing financial resources are the first steps in closing the wealth gap.

Digital Journal: What are some of the challenges the financial services industry faces when connecting with underserved communities?

Griffin: We have a long history of credit, wealth and health inequities that have contributed to the financial disparities and underrepresentation of underserved communities in the mainstream financial system. With so many people being left behind, there’s an inherent lack of trust that people from underserved communities feel toward the system. And because of that, we see a lot of people turning to self-professed “financial experts” for guidance—that can be a very slippery slope. Most people are well-intentioned, but the information they share is usually based on prior experience, unique circumstance or inaccurate information imparted from other self-professed “financial experts.” That can lead to a lot of misinformation in our communities.

Daniels: Time, availability and priority have always been barriers to reaching underserved audiences. As young adults and throughout the rest of our lives, we’re constantly busy with our schedules and addressing what we deem as important at the time. That’s only magnified with consumers from underserved communities, who are focused on putting food on the table.

The impact that recent economic cycles have had on consumers has shined a light on the importance of financial literacy, but now it’s on the industry to make the content and programming relevant for the underserved community. General content doesn’t resonate; how do we address the day-to-day that matters to them?

Digital Journal:  How does the industry build trust?

Griffin: Before we can build trust, we have to earn it. Too often we share information in a way that isn’t relevant to the community. Being present in the community – showing up – is critical in establishing trust. But just showing up is not enough. We have to engage people directly and listen to their needs. One way to do that is by working with organizations that understand their day-to-day struggles, such as non-profits, faith-based organizations, and Community Development Financial Institutions (CDFIs). Collaboration opens the door for increased dialogue and financial literacy programs that resonate with the audience.

Daniels: There are many detractors who question the value of financial literacy, but the truth is, it works—it just depends on who is delivering the message. We can’t go into communities and expect them to embrace us or take our words as gospel. We have to prove our value. That means understanding the cultural struggles and adjusting content to help them address those struggles.

Digital Journal: How do we increase financial inclusion among underserved communities?

Griffin: Increasing financial inclusion is reliant on a number of factors—financial education, the use of expanded data sources, as well as advanced analytics and technology. As a company, we’ve long been committed to helping broaden access to fair and affordable credit for all consumers. In addition to our consumer education efforts, we recently launched Experian Go, which empowers consumers without traditional credit histories to establish and build credit for free. That builds on Experian Boost, which was designed to enable consumers to add on-time utility, telecom and even streaming service payments to their Experian credit file.

Daniels: Our ability to impact financial inclusion is dependent on our ability to reach the entire community. That’s why in 2017, SFE&PD started our Student Ambassador Program. We found that by sharing financial knowledge with college students, oftentimes, the students would pass that information to their peers and home to their families. It provided an opportunity for our presence to be with communities and on college campuses at all times. Sharing information is the best way to uplift entire communities.

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Written By

Dr. Tim Sandle is Digital Journal's Editor-at-Large for science news. Tim specializes in science, technology, environmental, business, and health journalism. He is additionally a practising microbiologist; and an author. He is also interested in history, politics and current affairs.

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