We humans hardly change our behavior just by being told to. Let’s be frank about it.
We know our bad habits, our vices, but we won’t take action until the doctor tells us we are sick.
The same applies to addictions, binge shopping, or financial education.
We know it would be good to learn more about money management or debt, but we prefer to skip the lessons.
In the last years, financial institutions invested a lot in financial education programs.
But during a recent research with Volt’s team, I noticed something. The financial institutions miss the ideal moment to deliver the financial education pill.
One of the sweet spots is when they have to reject a client’s application for a loan or credit card.
It’s the lack of financial education that most likely led to this outcome because of the client’s indebtedness or overspending habit.
But the bank won’t tell him this truth. This foot in the client’s arse can become the first financial education lesson.
And the unhappy client could be more prone to take upon himself and upon his bad money habits because he has just been refused.
Unfortunately, financial institutions are blunt and poor on inspiration. Banks and non-bank financial institutions don’t even provide a reason for turning him down.
They just text him the message that his loan wasn’t approved or he’s not qualified for a credit card.
I see this as a missed opportunity to give the first bitter pill of the financial education treatment.